New orders and shipments of key economic goods increased again in June as consumer confidence edges higher but remains stunted by the continued spread of the Covid-19 delta variant.
New orders for manufactured durable goods last month increased 0.8 percent or $2.1 billion to $257.6 billion, the U.S. Census Bureau announced this month. Inventories of manufactured durable goods in June, up five consecutive months, increased $3.9 billion or 0.9 percent to $450.5 billion.
The index, which has increased in 13 of the last 14 months, followed a 3.2 percent rise in May. Excluding transportation, new orders increased 0.3 percent. Excluding defense, new orders increased 1 percent. Shipments of manufactured durable goods in June increased 1 percent or $2.5 billion, following a 0.4 percent rise in May. Transportation equipment, up following two consecutive increases, saw the No. 1 increase, $800 million or 1.1 percent to $71.6 billion.
Those numbers were released as consumer confidence in the U.S. was revealed to be broadly stable in July following five months of gains amid the spread of the Covid-19 delta variant and rising inflation, according to Dow Jones. The consumer confidence index slightly increased to 129.1 from an upwardly revised 128.9 in June. The reading beat the consensus of economists, who expected the indicator to decrease to 124, but is still below the February 2020 pre-pandemic level of 132.60. Spending intentions also increased in July, with a larger percentage of consumers saying they planned to buy homes, automobiles and major appliances in the coming months. Consumer confidence is expected to continue advancing in the next few months, but the spread of the Covid-19 delta variant, the end of unemployment benefit programs in some states and higher inflation could weigh on mood levels.
The present situation index, which reflects consumer assessments of current business and labor market conditions, rose to 160.3 in July from 159.6 in June, signaling that economic growth in 3Q 2021 is off to a good start.
“Consumer spending should continue to support robust economic growth in the second half of 2021,” said Lynn Franco, senior director of economic indicators at The Conference Board.
Also, short-term inflation expectations slightly eased but remained elevated. Recent inflation dynamics are expected to hit consumer confidence more than the spread of the delta variant because of its impact on everybody regardless of vaccination or political affiliation, said Tim Quinlan, senior economist at Wells Fargo.