June Durable Goods Preview
June Durable Goods Orders are expected to fall 0.3% following an unchanged reading in May and a 1% decrease in April. Durable goods ex-transports in June are expected to fall 0.2% following a 0.8% decrease prior. Shipments are expected to increase 0.7% following a 1.1% increase in May, while inventories are expected to gain 0.4%, matching the May increase, which would leave the inventory-to-sales ratio unchanged at 1.56.
The June Industrial Production report revealed a 0.7% increase in durable goods manufacturing, which should provide upside support for June orders. Vehicle production and shipments are expected to improve thanks to the American Axel work stoppage coming to an end.
The June ISM manufacturing production component improved slightly to 51.5 from 51.2 in May, but June employment report revealed further deterioration in manufacturing aggregate hours, which puts downward pressure on the June durable goods report.
Aircraft orders are expected to be lower after Boeing revealed a decline in orders over the period; however shipments are likely to remain strong.
The mixed set of data likely means a weak to muted reading for June Durable Goods.