Durable-Goods Drop Imperils Outlook for U.S. GDP Pickup
By Michelle Jamrisko - Aug 26, 2013
Orders for durable goods dropped in July by the most in almost a year, calling into question the strength of the projected pickup in U.S. growth.
Bookings for goods meant to last at least three years fell 7.3 percent, the first decrease in four months and the biggest since August 2012, the Commerce Department said today in Washington. The retreat was broad-based, with demand excluding the volatile transportation category unexpectedly falling.
The figures signal business investment was off to a slow start in the third quarter just as housing, a mainstay of the expansion, shows signs of cooling. Demand for military gear also declined last month, highlighting the risk that federal budget cuts will continue to slow the world’s biggest economy in the second half of the year.
“Growth will stay moderate,” said Michael Gapen, a senior U.S. economist in New York, at Barclays Plc, who forecast non-transportation orders would drop. “The fiscal drag will last longer.” Barclays cut its tracking estimate for growth this quarter to 1.9 percent from 2.1 percent after the report.
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http://www.bloomberg.com/news/2013-08-26/orders-for-u-s-durable-goods-fell-more-than-forecast-in-july.html