Recent US economic data paints a mixed but meaningful picture. While the manufacturing sector continues to contract, a sharp surge in durable goods orders offers hope for a rebound in business investment and broader economic momentum.
Manufacturing PMI: Still Contracting, But Production Rebounds
June’s Manufacturing PMI came in at 49.0 — marking the fourth straight month of contraction. However, the production sub-index climbed to 50.3, suggesting early signs of stabilization.
New orders (46.4), backlogs (44.3), and employment (45.0) all weakened. Input prices surged to 69.7 — driven primarily by new import tariffs, signaling inflationary pressures.
Durable Goods Orders: A Major Jump Sparks Optimism
On the brighter side, durable goods orders jumped 16.4% in May to $343.6 billion — the strongest monthly growth since 2014. The surge was driven by a 139% spike in non-defense aircraft orders, reflecting a rebound in aviation.
Core capital goods — a key proxy for business investment — rose 1.7% after two months of declines.
💬 Quote from Geraldo Kofit – Maxco RnD:
“The continued contraction in manufacturing PMI shows the production side of the economy is still under stress. But the sharp rise in durable goods, particularly core capital goods, signals businesses are regaining confidence to invest. This could support growth in Q3. The market is highly reactive to macro data right now — volatility will remain elevated.”
— Geraldo Kofit, RnD Maxco
Market Outlook
The recovery in capital goods points to potential economic resilience in Q3, yet rising input costs and tariff-related uncertainties continue to cloud the outlook.
Traders and investors will look ahead to July’s Flash PMI as the next key signal to gauge demand recovery.
source: https://www.youtube.com/watch?v=8uI8zoJoqfc