New durable goods orders for transportation grew 35.6% in July to $74.7 billion, pulling up overall durable goods orders to an +11.2% increase. New transportation order increases were led by an +$11.5 billion (+21.9%) increase in motor vehicle orders and included a +$2.0 billion (+77.1%) increase for defense aircraft orders, while civilian aircraft orders remained in negative territory. However, despite recent increases, transportation orders have been down ‑29.0% for the year, with orders dropping for civilian aircraft (-136.2%), motor vehicles (-21.5%), and defense aircraft (-13.3%). Excluding transportation, orders were up +2.4%, with the largest gains for defense capital goods (+30%), computers (+9.0%), and communications equipment (+8.5%).

The Federal Reserve announced an update to its longer run goals and monetary policy. The updated policy noted that if inflation were persistently below the 2% goal for a period of time, then the Federal Reserve would set an appropriate monetary policy to bring inflation to moderately above 2%, with the goal of a 2% average value over time. The revised statement also noted that the Federal Funds rate was more likely to be constrained to its effective lower bound more frequently, which increases the downward risks for inflation and employment, and as a result the “Committee is prepared to use its full range of tools to achieve its maximum employment and price stability goals”.

Reopening businesses accounted for a +0.4% increase in personal income for July, but the increase was partially offset by decreases in government benefits and income on assets. After tax disposable personal income was up +0.2%, but was down -0.1% after adjusting for inflation. Yearly inflation edged up by +0.1% to +1.0%, with core inflation, which excludes the volatile food and energy components and is the Federal Reserve’s preferred measure for inflation, growing +0.2% to +1.3%. Personal savings as a percent of disposable remained high at +17.8%, but slowed from June’s +19.2% rate. Consumer spending slowed from +6.2% growth in June to +1.9%, with spending for durable goods growing by +3.1% vs a +1.4% increase for nondurable goods, and service spending up +1.9%.