While June’s rate of contraction was still a fast rate of month-over-month contraction, it was a slower rate of contraction than the previous two months.
The month-over-month rate of contraction in machine tool unit and dollar orders slowed sharply in June. The annual rate of contraction may be near or at a bottom.
New orders for real durable goods totaled $225,331 million in June. This was more 25-40% more than April and May when many states closed their economy.
The month-over-month rate of growth for durable goods spending was 11.7%, which was the fastest rate of growth since July 2005.
In June, real disposable income was $16,028 billion, which was 8.1% more than one year ago. The extreme month-over-month rate of growth in disposable income is a direct result of government payments to individuals.
The Gardner Business Index reported its third month of slowing contraction in July.
Permits filed in June were up 11.7% compared with one year ago, returning to double-digit growth after two months of contraction.
Compared with one year ago, capacity utilization contracted 15.1%, which was the second straight month that the month-over-month rate of change contracted at a slower rate.
In June, the index for production of durable goods was 95.2. The index increased for the second month in a row after reaching the second-lowest level for the index since January 2010.
The pandemic accelerated the contraction in metalworking and extended the accelerating contraction in cutting tool orders. But, the GBI: Metalworking indicates the lows in cutting tool orders may be in the past.
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