The Commerce Department said Tuesday that durable goods orders have increased in 13 of the past 14 months. That includes a 0.8% increase last month on things made to last three years or longer.
These orders come from wholesalers and retailers, who buy items like washing machines to sell to consumers. Also, inventories of durable goods waiting to be shipped from factories are up.
That could help drive down inflation, said Timothy Fiore, at the Institute for Supply Management.
“So there would be a natural easing of the price growth that we’ve seen now, really since the pandemic started,” he said.
Growing inventories should ease any shortages that drive up prices.
There’s another part of the durable goods report that measures equipment businesses buy so they can make more stuff to sell, like electronics and computers. Those orders were up about 0.5% last month.
That may reflect a rise in automation, said Bank of America economist Joe Song. Like, say, in office buildings that used to have security guards.
“They’ll forgo, maybe, security personnel for a kind of kiosk to check in,” Song said.
But let’s not get ahead of ourselves, said former Federal Reserve economist Claudia Sahm. Tuesday’s report is backward-looking — for June. Sahm will scour next month’s durable goods report because “if the delta variant is starting to make the recovery a little wobbly, that’s one of the places it’s going to show up.”
In other words, if consumers lose confidence, they’ll put off big purchases. Like durable goods.