U.S. Durable Goods Orders Drop As Factory Woes Continue

ByBridgeNews The U.S. manufacturing sector showed renewed weakness in June as new orders for durable goods fell 2.0%, after climbing a revised 2.7% in May, the Commerce Dept. said July 26. The decline in durable-goods orders was weaker than the 0.5% drop expected by Wall Street analysts and was widespread across product segments, with the sharpest drops posted for communications equipment and motor vehicles. Orders for computers and electronic products fell 3.2%, led by a 20.8% plunge in communications equipment. More telling, orders for communication equipment were down 60.8% from June 2000. In one of the few bright spots in the report, orders for semiconductors climbed 3.2% in June from May. Depressing overall orders was a 3.3% decline in transportation orders. Orders of motor vehicles and parts decreased 5.0%, while orders for aircraft and parts fell 1.5%. Manufacturing activity in the U.S. has been sliding since late last year, contributing to a sharp slowdown in the economy. New orders for durable goods for the first half of the year are down 11.6% from the same period a year ago, and orders fell 2.2% in the second quarter from the first quarter. The June durable goods report showed that the nation's factory sector remains a drag on the economy but will not prevent a modest recovery in the second half of the year, economists said.