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Durable goods orders were better than expected in June

Spending On Durable Goods And Cars Help Boost Third Quarter GDPSpending On Durable Goods And Cars Help Boost Third Quarter GDP

New orders for manufactured durable goods, such as refrigerators, aircraft and heavy machinery, climbed 0.7% in June, rebounding from a slight decline in May and climbing for the fourth time in the last five months.

The new orders increased by $1.8 billion to $239.9 billion, the Commerce Department reported on Friday. Observers had expected a 0.5% increase, according to a Bloomberg poll. Meanwhile, new orders grew 0.8% excluding transportation — a gain that was also better than expected.

The Commerce Department said machinery led the growth in June, with new orders for that segment rising 2.4%. That followed two consecutive monthly declines.

Shipments of manufactured goods increased a modest 0.1% in June, an increase that was driven by transportation equipment. Unfilled orders, meanwhile, increased 0.8%. They’ve risen in 14 of the last 15 months.

The better-than-expected durable goods data comes before a busy week of economic indicators, including July’s employment report, gross domestic product data for the second quarter and pending home sales. The Federal Open Market Committee is also hosting a meeting next week.

While the U.S. economy shrank a surprisingly sharp 2.9% in the first quarter of 2014, the worst quarterly performance since the first quarter of 2009, the economy is expected to improve drastically in the second quarter helped by better weather conditions, some pent-up demand after a harsh winter, and job growth.