Durable goods orders in July fall far short of expectations

The economic news continues to worsen for the Obama administration during Wreckovery Summer.  Analysts had predicted a 3% growth in durable-goods orders for July, but the final number from the Commerce Department came to a tenth of that — a meager 0.3% growth.  And that’s the good news.  Excluding transportation, durable goods orders fell 3.8% last month:

Orders for U.S. durable goods increased less than forecast in July, a sign that one of the few remaining bright spots in the economy is cooling.

Bookings increased 0.3 percent, compared with the 3 percent median estimate of 75 economists surveyed by Bloomberg News, figures from the Commerce Department showed today in Washington. Excluding transportation equipment, demand unexpectedly fell. …

Economists’ estimates in the Bloomberg survey ranged from gains of 1.2 percent to 6.8 percent.

Bookings excluding transportation equipment dropped 3.8 percent, the most since January 2009. The survey median projected a 0.5 percent gain.

Commerce’s official announcement notes that the transportation orders came mainly from aerospace:

New orders for manufactured durable goods in July increased $0.6 billion or 0.3 percent to $193.0 billion, the U.S. Census Bureau announced today. This increase followed two consecutive monthly decreases including a 0.1 percent June decrease. Excluding transportation, new orders decreased 3.8 percent. Excluding defense, new orders increased 0.3 percent. Transportation equipment, also up following two consecutive monthly decreases, had the largest increase, $6.1 billion or 13.1 percent to $52.6 billion. This was due to nondefense aircraft and parts, which increased $4.0 billion.

While orders on most goods fell 3.8%, inventories continued to increase as demand falls:

Inventories of manufactured durable goods in July, up seven consecutive months, increased $1.8 billion or 0.6 percent to $311.2 billion. This followed a 1.3 percent June increase. Machinery, up five consecutive months, had the largest increase, $0.9 billion or 1.9 percent to $51.4 billion.

We’re building an inventory bubble that will result in factory slowdowns and lost jobs.  Bloomberg notes that manufacturing has been the one bright spot in the supposed recovery, at least until the summer.  And that 2.4% GDP number from Q2 looks shaky, too:

A Commerce Department report in two days may show the U.S. economy grew at a 1.4 percent annual pace from April through June compared with the 2.4 percent rate initially estimated by the government, according to the median estimate of analysts surveyed.

President Barack Obama’s stimulus package probably added between 1.7 and 4.5 percentage points to gross domestic product for the three months through June, the nonpartisan Congressional Budget Office said yesterday in a report.

In other words, absent artificial stimulation, we had no growth at all in Q2.  Depending on the final revision, due on Friday, we could be anywhere from -0.3% to -3.4% excluding Porkulus in Q2.  Recovery Summer, indeed.

Update: Suitably Flip is predicting an unsuitable double-dip.  Technically, that would take two quarters of overall negative growth, but clearly we’re heading in that direction.