WASHINGTON (AP) — Orders to U.S. factories for large manufactured goods rose last month after sharp declines the previous two months, propelled by demand for commercial aircraft and cars. A category that tracks business investment had its biggest increase in four months.
Orders for durable goods — or items meant to last at least three years — rose 2% in June, the Commerce Department said Thursday. That's after a 2.3% decline in May and an even bigger 2.8% drop in April.
A category that serves as a proxy for business investment rose 1.9%, its best showing since February. Economists have been worried about a slowdown in business investment orders, believing it shows business concerns about rising trade tensions.
President Donald Trump in May more than doubled the tariffs he has imposed on $200 billion in Chinese imports from 10% to 25%. Trump threatened to broaden the punitive tariffs to cover another $300 billion in Chinese imports if the two countries are not able to reach a trade deal the administration is seeking to provide better protections for U.S. technology.
Some hopeful news on the U.S.-China trade dispute came Wednesday when Treasury Secretary Steven Mnuchin told reporters that U.S. Trade Representative Robert Lighthizer will meet with Chinese leaders next week in Shanghai. Mnuchin said he expects several meetings before any deal is done — including more in Washington.
Aircraft orders, typically a volatile category, jumped about 75%, after falling more than 50% in May and almost 40% in April. Orders for cars and auto parts increased 3.1%, its biggest increase since July of 2018. That's good news for automakers, who have struggled to sell new cars this year.
Excluding aircraft, cars, and other transportation equipment, orders increased 1.2% — the biggest gain since April of last year — another potentially good sign for an economy that's expected by many to grow more slowly the rest of the year.
The U.S. economy grew at a solid 3.1% annual rate in the January-March quarter — a pace that may prove to be the high mark for 2019. The first estimate for second quarter GDP — the April-June quarter — will be released Friday. Most economists believe growth has slowed sharply in the current April-June quarter to less than 2%, in part due to ongoing trade disputes.