June Factory Orders Decline to Lowest Since January 2024

June Factory Orders Data

• 📉 Factory orders in June saw a decline of -4.8%, marking the weakest performance since January 2024.
• 📈 In contrast, the previous month's factory orders were revised upwards to 8.3%, representing the second-highest figure on record since 1956, largely attributed to tariff impacts.

Stripping Out Transportation

• 📊 Excluding the transportation sector, factory orders showed a modest increase of 0.4%, slightly exceeding expectations.
• 🚀 This figure follows an upward revision for the prior month, which was adjusted from 0.2% to 0.3%.

Durable Goods Performance

• ⚠️ Final readings for durable goods showed a significant decrease of -9.4%, a historic drop for a series dating back to 1992.
• ✈️ When stripping out transportation, durable goods orders increased by 0.2%, highlighting the substantial impact of aircraft orders on recent month-to-month volatility.

Shipments and Capital Spending

• 📉 Shipments, a proxy for capital spending, decreased by 0.8%, the largest decline since April of this year.
• 📈 Despite the recent dip, overall shipments for the period were up 0.3%, largely in line with expectations.

Market Reaction and Outlook

• 📊 Interest rates remained unchanged, with the 10-year rate at 4.21% and the 2-year rate at 3.69%.
• ⚖️ Equity and fixed income markets appeared to be in equilibrium, awaiting further signals from the labor market and the Federal Reserve.