Durable goods orders plunged during June

Orders to U.S. factories for long-lasting manufactured goods fell in June by the largest amount in nearly two years, reflecting a big decline in the volatile category of commercial aircraft and broad weakness across a number of other areas. The key category that tracks business investment eked out a small gain.

Demand for durable goods dropped 4 percent in June, the biggest setback since an 18.4 percent drop in August 2014, the Commerce Department reported Wednesday. Excluding the volatile transportation area, orders would have still been down but by a smaller 0.5 percent.

The new report was weaker than analysts had expected and indicates manufacturing remains under stress from weak global demand and a strong dollar.

“It is a tale of two economies,” said Chris Rupkey, chief financial economist at MUFG Union Bank. “Consumer expenditures are strong with the economy at full employment but companies are pulling back as the strong dollar and slower world growth are taking a toll on exports.”