Excluding transportation, orders down 0.4%
The numbers: Orders for durable goods rose 2.1% in July, the Commerce Department said Monday. It is the second straight monthly gain. Economists expected a 0.9% gain according to the MarketWatch survey.
What happened: Details were weaker than the headline.
The gain in orders was led by transportation, a 47.8% surge in aircraft and parts that is mainly Boeing BA, +0.85% orders. Excluding that sector, orders fell 0.4%, the biggest drop since March.
A key metric, orders for non-defense capital goods, rose 0.4% in July, but a gain in the prior month was revised down to a 0.9% gain from the prior estimate of 1.5% rise. Orders in this sector are now down 0.3% from a year ago.
Shipments of non-defense capital goods fell 0.7% in July, largest drop since Oct. 2016.
Orders for machinery, primary metals and fabricated metals also declined.
Big picture: The U.S. manufacturing sector is in a technical recession, struggling with trade tension, global weakness and the strong dollar. Economists think capital goods orders are likely to be weak in the third quarter.
What are they saying? “No bottom yet for core orders,” said Ian Sheperdson, chief economist at Pantheon Macroeconomics.
Market reaction: The market is ignoring the durable goods orders and focusing on trade headlines. Stock index futures were higher as President Donald Trump said China wants to return to the negotiating table. The Dow Jones Industrial DJIA, +1.05% has been lower for four straight weeks.