US factory orders fell in July for the first time in 10 months
The summer slowdown in US manufacturing seen in surveys of private firms and regional federal banks on Friday was underlined by a report showing factory orders falling for the first time in ten months.
The Commerce Department said orders for US factory-made goods fell 1 percent. Economists had expected orders to rise 0.2 percent.
The increase in the previous month was revised from two percent to 1.8 percent.
New orders for durable goods fell 0.1 percent after rising 2.3 percent in June. The decline in durable goods came after four consecutive monthly increases.
Figures are seasonally adjusted but not adjusted for inflation. Prices paid to US durable goods manufacturers rose 0.5 percent, according to the Labor Department’s Producer Price Index. This indicates that the real or inflation-adjusted decline was closer to 0.6 percent, which is an indication of waning demand for goods.
New orders for consumer durables fell 1.4 percent and prices rose 4 percent, indicating a real decline of 1.8 percent.
Surveys of manufacturers indicate a decline or even contraction in the sector for a few months. Until July, however, official government statistics showed that requests were growing on a nominal basis. Adjusted for inflation, orders have fallen several times over the past year.
Non-durable goods orders fell 1.9 percent in the month. This is the biggest drop since April 2020. Much of that reflects the drop in the price of gasoline. Excluding petroleum, orders fell 0.3%.
Prices of non-durable goods minus food and energy rose 0.7 percent. Therefore, adjusted for inflation, the decline in non-durable goods is much higher.
Non-defense capital goods orders, excluding aircraft, rose by a revised 0.3 percent in July, down slightly from the previous reading of 0.4 percent. This category is often considered a commercial investment agent. The PPI gauge of private capital equipment prices rose 0.5 percent, which likely means real business investment fell in July.