The numbers: The increase in flying and rebound in the airline industry gave a boost to U.S. durable-goods orders in August, but ongoing supply shortages held back automakers and and remained a drag on the nation’s economic recovery.
Orders for durable goods leaped 1.8% last month and business investment also rose, the government said Monday. Economists polled by the Wall Street Journal had forecast a 0.6% increase.
The government also revised its July report to show a sizable increase in bookings instead of a decline.
The increase in business orders was somewhat exaggerated last month, however. Boeing
got another big flush of orders for its 737 Max jets and other planes.
Bookings rose a scant 0.2% if transportation is excluded. The numbers are seasonally adjusted.
Big picture: The manufacturing side of the economy is not as big as it once was, but it still plays a big role in how fast the U.S. expands and is an important bellwether. The good news is that manufacturers still have plenty of demand, a sign of a healthy economy.
The biggest problem for manufacturers is getting critical supplies and finding enough skilled workers to staff their plants. Material and labor shortages are likely to persist at least until the end of the year and restrain an otherwise rapid U.S. recovery.
Key details: Orders for new commercial airplanes soared 78% in August and drove most of the increase in bookings for U.S.-made durable goods — products designed to last at least three years.
Orders for expensive airplanes tend to be lumpy from month to month, however, and are not the best gauge of how Americans manufacturers are doing.
Automakers, for their part, would be able to sell more cars if they could make enough of them. Yet a global shortage of computer chips has retarded production and scared off some buyers. New orders dropped 3.1% in August.
New orders were softer outside transportation.
Bookings rose for electrical equipment and fabricated metal parts used in an array of consumer and business goods.
Yet orders fell for computers, machines and primary metals that are integral to the production of manufactured goods.
Business investment, on the other hand, was robust. They increased 0.5% in August and increased for the sixth month in a row.
These so-called core orders are viewed by investors as a signal of future business prospects — and prospects look good. Business investment has risen almost 14% in the past year.