P.M. BRIEFING : July Drop in Orders for ‘Big Ticket’ Durable Goods Is 4th This Year

Orders for “big ticket” durable goods fell 1.9% in July, the fourth decline this year, the government said today in a report that showed manufacturing continuing to struggle despite recent interest rate declines.

The Commerce Department said demand for durable goods, items expected to last three or more years, totaled a seasonally adjusted $122.9 billion last month, the lowest level since October, 1988.

Military orders plunged 14.7% in July after a 17.4% rise in June. The other major decline came in non-electrical machinery, which plummeted 9.7% last month after a 4.8% rise in June.

Durable goods, one of the most interest-rate-sensitive sectors of the economy because consumers often borrow to buy them, also had declined in January, February and May.

The latest drop came despite moves by the Federal Reserve Board since early June to nudge interest rates lower. Earlier, the central bank had been raising rates to dampen economic vigor and inflationary pressure.