Please note the headline on the Bloomberg News network. It is extremely positive. Things are clearly improving. Only one problem. The headline is a complete falsehood. Durable goods orders DROPPED by 1%, much worse than expected. They were expected to rise 1%. In addition, the previous month’s DECLINE was adjusted to a bigger DECLINE than originally reported. This is Orwellian reporting at its best. Bloomberg News is a cheerleader for the Obama administration and will spin the news in any way that benefits the Savior. DO NOT TRUST ANYTHING YOU SEE OR HEAR FROM THE MAINSTREAM MEDIA without verifying the information yourself. This kind of reporting disgusts me.
Orders and shipments for non- military capital goods excluding aircraft climbed in June, signaling investment by U.S. businesses picked up heading into the second half of the year.
Such bookings increased 0.6 percent after jumping 4.6 percent in May, more than previously reported, figures from the Commerce Department showed today in Washington. Total orders for durable goods, those meant to last at least three years, unexpectedly dropped 1 percent, depressed by a decrease in demand for aircraft which is often volatile.
Eaton Corp. is among manufacturers benefiting from a pickup in demand as companies in the U.S. and abroad update equipment that is helping to support the recovery. The gains will partially compensate for a slowdown in consumer spending that is causing the world’s largest economy to cool heading into the second half of the year.
“Businesses are, in general, still investing,” said Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit, who projected a decline in durable goods orders excluding transportation. “If they want to compete, they have to invest. The recovery is continuing.”
Stocks dropped after the report showed weakness in overall orders, with the Standard & Poor’s 500 Index declining 0.5 percent to 1,108.84 at 10:27 a.m. in New York. Treasury securities rose, pushing the yield on the benchmark 10-year note down to 3.04 percent from 3.05 percent late yesterday.
Worse than Forecast
Economists forecast total orders would climb 1 percent, according to the median of 76 projections in a Bloomberg News survey. Estimates ranged from a drop of 1 percent to a 4 percent gain. The Commerce Department revised May orders to show a 0.8 percent drop compared with a previously reported decrease of 0.6 percent.
Bookings for non-defense capital goods excluding aircraft are a proxy for future business investment. Over the past three months, these orders climbed at a 25 percent annual pace, up from a 15 percent gain in the three months to March, signaling companies are ramping up investment.
Shipments of those items, used in calculating gross domestic product, increased 0.2 percent after rising 1.5 percent in May.
Demand in June increased for computers, communications and appliances and electrical equipment.
Commercial aircraft orders dropped 26 percent after falling 30 percent in May and surging 216 percent a month earlier. Boeing Co., the world’s second-biggest commercial-plane maker, said this month it received 49 aircraft orders in June compared with 5 in May and 34 in April. Industry data don’t always correlate with the government’s statistics on a month-to-month basis.
Bookings excluding transportation equipment fell 0.6 percent compared with a projected 0.4 percent gain, according to the survey median.
Eaton, the Cleveland-based maker of engine valves and transmissions, last week boosted its profit projections for 2010 on rising demand for truck parts and hydraulic systems.
“This year is shaping up to be better than we had forecast,” Chief Executive Officer Sandy Cutler said in a July 21 statement.
Growing demand from overseas is also helping American factories. Exports climbed 21 percent in the 12 months ended May, the biggest year-over-year gain since comparable records began in 1992, according to Commerce Department data.
After gaining 17 cents against the euro from mid April to early June on mounting concern over the European debt crisis, the dollar has retreated about 11 cents since June 7 on growing signs the continent is weathering the turmoil. A cheaper dollar helps restore the competitiveness of American products abroad, contributing to higher sales.
Recent reports showed Europe’s service and manufacturing industries unexpectedly accelerated in July, German business confidence surged to a three-year high and the British economy grew in the second quarter at the fastest pace in four years.