Durable goods orders, long considered one of the more volatile series issued each month by the government, certainly lived up to its reputation in July, as the Commerce Department earlier this morning released figures showing that such orders had plunged by 7.3% last month. That setback was some 50% more than the forecasted decline of 4.9%.

This dour result compares with gains of 3.9% and 5.5% in June and May, respectively. Meanwhile, if we back out the transportation component from the overall report, to get the so-called core rate of durable goods orders, we find that such demand was not nearly as weak, registering a drop of just 0.6%. That was not a materially worse performance than in June, when such orders had ticked up by just 0.1%; in May, the core advance had been a modest 1.3%.

Backing out defense orders from the mix, moreover, we find that such orders fell last month by a significant 6.7%; gains of 2.9% and 5.1%, by comparison, were inked in June and May, respectively.

Looking at the overall report for last month, the big drop in this series came in contracts for jetliners and large military goods. As far as the cumulative results for the seven months are concerned, we find that such orders were up 3.3%. Core durable goods orders are ahead by 3.8% over this same time period. 

Among other categories, there were large declines in orders for computers and electronics. Computer-related demand plunged by 19.9%, meanwhile. Appliance orders also contracted sharply, falling by 4.3%, while capital goods orders plummeted by 16.1% and nondefense capital goods orders declined almost as steeply, falling by 15.4%.

Overall, this was a weak report and suggests that along with Friday's disappointing showing in new home sales that the Federal Reserve might yet have reason to pause before starting to taper its bond buying program before several months more have passed.          

At the time of this article's writing, the author did not have positions in any of the companies mentioned.