Economic Report: U.S. durable-goods orders rise 0.8% in June as demand for passenger planes revives

This post was originally published on this site

The numbers: Orders for passenger planes and other long-lasting products rose again in June even as manufacturers grappled with broad shortages of supplies and labor that are preventing a robust U.S. economic recovery from being even stronger.

Orders for durable goods climbed 0.8% last month, the government said Tuesday. Economists polled by the Wall Street Journal had forecast a 2% increase.

The increase fell short of Wall Street expectations mostly because the level of new orders in the prior month was raised. Bookings in May were revised up to show a 3.2% gain instead of 2.3%

A resurgent U.S. economy has ignited an explosion in demand for cars, computers, consumer electronics and all sorts of goods, but it’s created its own problems: Big shortages in both supplies and labor.

These shortages are likely to persist through the end of the year. That could choke off some of the growth in the economy and prolong the recovery.

Durable goods are products meant to last at least a few years.

Read: ‘Delta’ chill in the air? A booming economy faces new uncertainty

Big picture: Businesses have plenty of orders. They just can’t fill all of them right away.

Take automakers. They’ve had to delay production of some models because they don’t have enough computer chips to complete them.

The shortages have driven up the cost of supplies and pushed companies to try to pass these costs onto customers by charging higher prices. All of this has added to the biggest burst of inflation in the U.S. since at least 2008.

The Federal Reserve contends the price increases will fade by next year as the shortages go way and the the U.S. and global economies return to normal. But for now they are causing plenty of headaches.

Read: Sales of new U.S. homes sink to lowest level since pandemic as high costs and slim pickings frustrate buyers

 Market reaction: The Dow Jones Industrial Average
DJIA,
+0.24%

and S&P 500
SPX,
+0.24%

were set to open slightly higher in Tuesday trades.

Add Comment