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In June, the value of orders for pricey items designed to last three years, such as refrigerators and factory robots, grew by 1.9 percent to $272.6 billion, the U.S. commerce department reported.
However, when defense spending is excluded, June’s gain was 0.4 percent. During the same month, inflation flew at 9.1 percent.
Commerce department figures are not adjusted to account for inflation. Therefore, the actual number of durable goods ordered in June declined.
The value of new orders for non-defense goods and also excluding aircraft rose 0.5 percent to $73.9 billion in the month, according to The Wall Street Journal.
During the first half of this year, the dollar value of orders for these so-called “core” durable goods was 10.1 percent greater than the same period in 2021, the department said.
The dollar value of durable goods orders has grown in eight of the past nine months, the department said.
The gains “will reverse in July,” Ian Shepherdson, Pantheon Economics’ chief economist, wrote in a research note last week.
June’s gain “does not change the bigger picture of a slowdown in spending, but it has not reached recession-type proportions,” he said.
TREND FORECAST: The market for durable goods has been caught up in Dragflation, our Top 2022 Trend of declining economic activity amid rising prices.
The reduction in the volume of durable goods will continue to fall in the months ahead and is a leading indicator of, as well as a cause of, recession.