By Utta von Nuremburg

WASHINGTON (MNI) – Wednesday morning’s Durable Goods Orders report
from the Commerce Department, following two monthly declines, is
expected to show an increase for July, helped by the non-defense orders
category mainly generated by Boeing.

A survey of economists by Market News International centered on a
rise of 2.5% in the headline figure, following a 1.2% decline in June
and a 0.7% drop in May. Prior to May, Durables orders had shown five
consecutive monthly increases.

July’s result should receive a boost from rising transportation
orders of nondefense aircraft. In July, Boeing announced large aircraft
orders from Emirates Airlines, American Airlines, Alaska Airlines and
Azerbaijan Airlines. Meanwhile, even ex-transports, durables are
expected to rise 0.5%.

According to Kim Rupert, Economist at Action Economics, “We can
expect to see a rebound from the weakness reported in May and June’s
data. There are expectations of increased orders from Boeing and the
report will likely show a decent boost from vehicle shipments.”

In June, durables were up in defense aircraft and parts
(6.5%), electrical equipment, appliances, and components (3.7%), motor
vehicles and parts (2.5%), computer and related products (2.5%),
communications equipment (1.5%), fabricated metal products (1.2%), and
capital goods ex-aircraft (0.6%). This was offset by new orders for
nondefense aircraft and parts which plummeted 25.6% in June and 30.2% in
May.

Also of note, July’s ISM National Report on Business stated that
“manufacturing continued to grow during July, but at a slightly slower
rate than in June. Employment, supplier deliveries and inventories
improved during the months and reduced the impact of a month-over-month
deceleration in new orders and production.”

Although ISM’s July PMI registered 55.5, a decrease of 0.7% when
compared to June’s reading of 56.2, manufacturing continued to grow. In
addition, the New Orders category registered 53.5. A reading above 50
indicates that the manufacturing economy is generally expanding.

— Utta von Nuremburg is a Need to Know News Reporter in Washington

** Market News International Washington Bureau: 202-371-2121 **

[TOPICS: MAUDS$,M$U$$$]