Growth in orders for durable goods to U.S. factories slowed in August, casting a shadow on Vice President Kamala Harris' claims that the Biden-Harris administration's policies have strengthened America's industrial power.
The Commerce Department said Thursday that durable goods orders did not increase at all in August.
However, this was better than expected. Economists had expected orders to fall by 2.7%. Orders increased by 9.9% in July, a slight upward revision from the previous forecast of 9.8%.
Core capital goods orders, which exclude volatile sectors such as transportation and defense and are considered an indicator of business investment, rose modestly by 0.2% last month, following a 0.2% decline in July. .
Harris has frequently said during her campaign that the U.S. factory sector has benefited from the policies of the Biden-Harris administration. However, over the past two years, core capital goods orders have not grown at all. In fact, the August 2024 numbers are slightly lower than the August 2022 numbers. Compared to the first eight months of last year, orders for core products increased by just 0.3%.
“From our nation's earliest days, America's economic strength has been tied to its industrial strength,” Harris said in what she billed as her major economic campaign speech Wednesday. “The same is true today, so I recommit our nation to global leadership in the areas that will define the next century.”
Uncertainty surrounding November's presidential election has caused companies to pull investments and pause expansion plans. Manufacturing employment has fallen by 34,000 jobs in the past three months, according to the Labor Department. Manufacturing employment has been virtually stagnant for the past two years, even though the Biden-Harris administration has pumped billions of dollars in subsidies into manufacturing.
Harris has said she plans massive tax increases on businesses if elected and has criticized President Donald Trump's proposal to impose tariffs on imported goods to benefit domestic manufacturers.
The pre-election slowdown suggests that manufacturing will likely struggle to grow in the coming months and perhaps years, depending on the outcome of the election.
Overall durable goods orders increased by 4.7% over the past two years. Orders received since the beginning of the year are down 1.3% from the previous year.
Durable goods order statistics are not adjusted for inflation.
Global conflicts are still driving money into the factory sector. Defense capital goods orders increased by 5.3% in August, and defense aircraft and parts orders increased by 8.3%.
Given the high prices of commercial aircraft, aircraft orders are highly volatile. Non-defense aircraft orders fell by 7.5% in August.
Orders for cars, trucks and parts rose 0.3% in August. Orders excluding transportation increased by 0.5%.
Orders for machinery, computers, and home appliances increased. Orders for metals such as steel and aluminum increased, and the number of products manufactured from metals also increased.
