Orders for industrial products fell 0.2% in August, the Commerce Department said Thursday, following a notable increase in the previous month. The decline marks the third decline in orders in the past four months and signals continued difficulties in manufacturing.
Economists had expected orders to be flat in August, reflecting a cautious outlook amid a mixed economic environment. Durable goods orders were adjusted to remain unchanged for the month, the data showed, marking a sharp change from July's impressive 9.8% growth. This revision was a downward revision from the previous forecast, which suggested a modest increase of 0.1%.
Defense-related orders have contributed positively to factory activity this year, but concerns remain about the overall picture. Excluding defense products, total orders fell 0.4% in August, pointing to broader manufacturing vulnerabilities.
On a slightly brighter note, orders for non-defense capital goods, excluding aircraft, increased by 0.3% in August, but this was revised upward from the originally expected 0.2% increase. However, shipments of these key orders, which are essential to the government's gross domestic product (GDP) calculations, fell 0.1%, following a 0.4% decline in July.
Manufacturing continues to face challenges. The Institute for Supply Management's Manufacturing Purchasing Managers' Index (PMI) has shown contraction for most of the past two years. The sustained weakness raises concerns about whether the sector can contribute to the economic recovery in coming months and undermines Vice President Kamala Harris' claims that the Biden-Harris administration has spurred a manufacturing boom. are.
