Durable goods orders fell in June

While the U.S. manufacturing sector has experienced steady growth over the past few years, recent reports indicate that its expansion could be slowing.

According to a report from Bloomberg, orders for U.S. durable goods fell unexpectedly in June. Industry analysts and manufacturing company officials met the news with a collective groan, as they worry that depressed business demand for new products will hurt economic growth during the latter half of this year.

According to Commerce Department data released this week, bookings for goods meant to last at least three years fell 2.1 percent in June. The downshift in demand was especially pronounced given the 1.9 percent uptick in bookings logged in May.

As businesses throughout the globe have endeavored to achieve business cost reductions and improve strategic sourcing in an effort to cut costs, their efforts have been at times negated by a contraction in consumer spending, experts affirm.

"The momentum in capital spending has slowed," HSBC Securities economist Ryan Wang said. "Unless we get a pickup in consumer demand, the overall rebound in growth is going to be pretty moderate."

The drop in durable goods bookings caught many analysts off guard. A prior survey of 76 economists by Bloomberg had projected a 0.3 percent increase in new orders.

Demand for business equipment like machinery and computers fell in the month, according to data. Transportation equipment orders inched up only slightly by 0.1 percent, while demand for transportation gear fell by 8.5 percent.

"The ups and downs over the past few months have left the level of orders relatively flat and that does not bode well for future growth," Naroff Economic Advisers president Joel Naroff told MarketWatch.

Industry experts said that the monthly durable goods report is highly volatile because certain equipment, like aircraft, is exceedingly expensive and orders can vary greatly from month to month.

In somewhat positive news, shipments of durable goods increased 0.5 percent in June, while inventories climbed 0.4 percent during the month.

"We're not looking at a robust recovery period here, but through thick and thin, it’s being sustained," ISM chairman Bradley Holcomb said of the manufacturing sector’s consistent expansion.