WASHINGTON – Orders for long-lasting durable goods rose by much less than expected in June but the previous month's decline was halved, government data showed on Wednesday.
The Commerce Department (search) said orders for big-ticket items meant to last at least three years rose 0.7 percent after shrinking 0.9 percent in May. May's drop was revised from a 1.8 percent decline.
Wall Street had forecast a 1.9 percent rise as the factory sector recouped after two months of loss.
The data signals demand was only building slowly at the close of the second quarter and the softspot the U.S. economy is thought to have hit between April and June and growth may not get as strong a boost from the factory sector as officials had hoped as the third quarter gets under way.
Preliminary second quarter gross domestic product will be released on Friday and is forecast to show U.S. growth slowed to an annualized 3.6 percent compared with 3.9 percent in the first quarter.
Transportation equipment advanced 4.2 percent and capital goods gained 4.1 percent in June but many of the other categories were subdued with computers and electronic products retreating by 1.0 percent.
Durable goods orders (search) excluding defense fell 0.4 percent, the fourth fall in six months, while bookings excluding transportation declined 0.6 percent in the third consecutive monthly retreat.
Non-defense capital goods excluding aircraft — a proxy for business spending — was up 1.2 percent. Defense-related capital goods orders jumped 30.4 percent while demand for military aircraft soared 79.1 percent.
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