Durable-goods drop will hurt freight

After rising 2.7% in May, durable-goods orders dropped 2% in June, according to a report issued by the U.S. Dept. of Commerce. That dashes hope the economy will rebound anytime soon. While orders for durable goods-those intended to last three or more years-fell 2% in June, orders for capital-goods equipment (excluding defense-related orders) dropped 3.4%. Shipments of durable goods were also down-falling

After rising 2.7% in May, durable-goods orders dropped 2% in June, according to a report issued by the U.S. Dept. of Commerce. That dashes hope the economy will rebound anytime soon.

While orders for durable goods-those intended to last three or more years-fell 2% in June, orders for capital-goods equipment (excluding defense-related orders) dropped 3.4%. Shipments of durable goods were also down-falling 2% from May's level.

Economist Jerry Leonard of Martin Labbe Associates told FLEET OWNER the durable-goods drop is especially discouraging, coming as it does on the heels of May's up tick. "It effectively wipes out the meager gain of last month," he said. "Everyone in the trucking industry is anticipating the point where the traffic decline will bottom out. So, with durable-goods orders dropping again, it means the point at which we start to bounce back is still several months away."

On the other hand, Leonard said the biggest drops registered in June were in orders for communications and computer equipment, which do not have as big an impact on truck traffic as other durable goods. "This report doesn't represent a big hit on those things that translate into large amounts of truck freight," he said.

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