US sees strong durable goods sales in August

US aircraft sales surged again in August, after falling in July, pushing sales of durable goods up more than double what economists had been expecting for last month
AFP

Washington (AFP) – US manufacturers booked strong sales of big-ticket durable goods in August, with orders for aircraft, computers, autos and communications equipment all rising, according to government data released Wednesday.

The increase was more than double what analysts were expecting but not enough to reverse a steep decline in July driven by volatile aircraft sales.

Sales of defense aircraft and other goods also swung low, weighing on the August number, according to the monthly data.

Still, the strong showing could boost GDP growth in the third quarter.

Total orders for durable goods rose 1.7 percent compared to July to $232.8 billion, a full percentage point above a consensus forecast for an increase of 0.7 percent, the Commerce Department reported.

So far this year, orders are up five percent over the same period of 2016.

Officials said they could not estimate the extent to which Hurricane Harvey, which made landfall in Texas on August 26, affected the monthly results, which were not designed to estimate manufacturing activity in specific geographic areas.

Mickey Levy of Berenberg Capital Markets said the report showed the US manufacturing sector was in robust health.

“The durable goods manufacturing sector is in great shape with factories increasing both investment and hiring,” he said in a client note.

“The rally in equity markets is boosting sentiment and expectations about future product demand and the weak US dollar — despite its recent strengthening — and improving global growth are increasing demand for US-manufactured goods.”

Aircraft orders, which spiked in June and tanked in July, rebounded again in August, surging 44.8 percent.

But excluding the transportation sector, which sees big swings from month to month, August orders were up only 0.2 percent from the prior month, the second straight monthly increase.

Excluding the defense sector, orders rose a strong 2.2 percent.

Defense aircraft orders fell 24.3 percent while defense capital goods orders were the weakest since February, falling 9.4 percent.

But orders for communications equipment saw their strongest monthly gain in nine months, rising four percent.

Motor vehicle orders, which have sagged during much of 2017, rose 1.5 percent.

Capital goods orders not including aircraft, key to the all-important oil sector, rose 0.9 percent, slowing after July’s 1.1 percent gain.

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