Skip to main content

Orders for long-lasting U.S. factory goods rose in June after declining for two months, a sign manufacturing is still growing despite a series of global trade disputes.

The Commerce Department said Thursday that durable goods orders – items meant to last at least three years, from cars to appliances – rose 1 per cent in June. Excluding the volatile transportation category, orders increased 0.4 per cent, the fifth straight monthly gain.

Demand for metals, such as steel and aluminum, fell 0.4 per cent, the second straight drop. Prices for the two metals have risen sharply since the Trump administration placed duties on them this spring.

Story continues below advertisement

But orders for most other goods remained healthy, evidence that U.S. trade fights with China, the European Union, Canada and Mexico have yet to significantly restrain manufacturing growth.

A category of orders that tracks business investment spending rose 0.6 per cent in June, following a 0.7 per cent increase in the previous month. May’s figure was revised higher from an initial estimate of a 0.2 per cent decline.

Auto orders jumped 4.4 per cent, the most in three years. That increase reversed a sharp drop in the previous month that occurred because of a fire at an auto parts plant. It may also have partly stemmed from efforts by auto companies to build up their inventories ahead of the potential implementation of large U.S. duties on imported cars and car parts.

Yet those auto duties appeared less likely after President Donald Trump took a step back Wednesday from his global trade fight after meeting with European Commission President Jean-Claude Juncker. The two leaders agreed to put new tariffs on hold while they negotiated a broader trade deal that could include the removal of steel and aluminum tariffs from European imports.

The Trump administration may still impose the duties later this year on auto imports from Canada, Mexico, Japan and other nations. The Commerce Department is investigating whether imported cars and trucks are a threat to national security.

The healthy increase in durable goods orders points to robust growth in the April-June quarter. Most economists forecast the economy expanded at an annual rate of roughly 4.5 per cent, with some projecting growth as strong as 5 per cent.

Still, a few economists lowered their forecasts on Thursday, because the durable goods report showed a slight decline in stockpiled goods. And preliminary estimates of the trade deficit suggested Americans bought more imported goods in the second quarter, rather than domestically-produced items.

Story continues below advertisement

Economists at JPMorgan Chase cut their forecast for the second quarter to 3.9 per cent, from 4.4 per cent.

Analysts say the growth spurt will likely prove temporary, fuelled in part by a jump in exports to get ahead of retaliatory tariffs imposed on U.S. goods by other countries. The economy is expected to expand just 2.5 per cent to 3 per cent in the third quarter.

Separately, the number of people seeking unemployment aid rose 9,000 to a seasonally adjusted 217,000 last week. The increase came after applications fell in the previous week to the lowest level since 1969, a sign that companies are holding onto their staffs and laying off few workers.

Report an error
Comments

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • All comments will be reviewed by one or more moderators before being posted to the site. This should only take a few moments.
  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed. Commenters who repeatedly violate community guidelines may be suspended, causing them to temporarily lose their ability to engage with comments.

Read our community guidelines here

Discussion loading ...

Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.
Cannabis pro newsletter