- Tim Quinlan, an economist at Wells Fargo Securities LLC
Orders for long-lasting manufactured goods surged in July by the most on record amid strong international demand for commercial aircraft. The Commerce Department said on Tuesday durable goods orders, items ranging from toasters to aircraft that are meant to last three years or more, soared 22.6% in July after an upwardly revised 2.7% advance a month earlier. July's increase was the largest on record and well above economists' forecasts for a 7.5% advance. A U.K. air show helped spark a 318% jump in plane orders, the most since January 2011. Meanwhile, orders for autos jumped 10.2%, a adding to signs of firming manufacturing activity, after declining 1.3% in June. Excluding transportation, orders, however, fell 0.8%, posting the biggest decline in this category since a 1.7% drop in December.
Despite some weakness in July, analysts believe that stronger factory output will bolster economic growth in the second half of this year. The government will revise its first estimate of GDP on August 28. Many economists believe that the figure will be revised down slightly but remain at a still robust 3.9% growth rate. Economists expect strength in employment, manufacturing and consumer spending to support healthy growth of around 3% in the second half of this year.
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