August 26, 2025
Durable goods orders fell by 2.8% in July after having plunged by 9.4% in June after having exploded by 16.5% in May. Durable goods orders have risen 3.3% in the past year. The dramatic swings in orders the past few months were the result of big changes in civilian aircraft orders.
Much of the change in durables is frequently in the transportation sector — airplanes, cars, and trucks. In July transportation orders declined 9.7% after having declined 22.7% in June after having jumped 48.5%in May. As a result, non-transportation orders rose 1.1% in July after climbing 0.3% in June and 0.6% in May. The non-transportation sector has risen 3.8% in the past year. They are climbing slowly but steadily.
The orders component of the Purchasing Managers Index fell sharply in February and March and has bounced around at a lower level in each of the past four moths. Tariffs are having a retarding effect on the demand for goods.
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Following a 0.5% decline in GDP in the first quarter and a 3.0% increase in the second quarter, we expect GDP growth of 2.5% in the third quarter and 1.8% growth for 2025..
Stephen Slifer
NumberNomics
Charleston, SC
Stephen,
It fascinates me that in the middle of one of the most gummed up Congress in decades which does not seem to get much of anything done one way or the other, business continues to surge forward beyond expectations. Maybe we are better off with a government that does less instead of more. All we do have to be concerned about is how much more of the wealth of our country gets held in the hands of the “1%” while much of the “99%”, especially those in the lower segments of that large group live in a less than middle class environment. Maybe you have answers to that dilemma.
…Darrel
Dividing new orders by PPI for capital goods and the durables build in orders has been flat. I think this leaves upside for the year ahead. But only a guess on that.
I don’t typically look at the thing you mentioned, but it makes sense to me.