Preview: Due July 27 - U.S. June Durable Goods Orders - Aircraft to bounce, ex transport slower but still firm
We expect a 3.7% increase in June durable goods orders after a 4.5% May decline as aircraft regain strength after a sharp dip in May, with a 0.9% increase ex transport, still firm, but less so than in most recent months.
Boeing data suggests shows aircraft orders in June were significantly higher than in May but not as strong as in April. Autos are likely to make a positive contribution to transport. We expect a second straight fall in defense though sharp surge in March and April will remain mostly sustained. Ex defense we expect a rise of 4.4% after a 4.6% decline in May.
The underlying picture remains positive, supported by heavy investment in AI. A 0.9% rise ex transport would be slower than in the last four months but still stronger than where trend was before a sharp an acceleration starting in December. A subdued June industrial production report suggests June may see ex transport orders on the low side of a firm trend.
We expect non-defense capital orders ex aircraft, a key indicator of business investment, to increase by 1.0%, also a slight slowdown from May’s 1.4%. This series has been more volatile than the ex transport one but with a similarly firm trend.
