US durable goods orders unexpectedly dropped in June, reversing most of the previous month’s gain. On a monthly basis, the durables dropped by 2.1% M/M. The details show that weakness was mainly based in transportation (-8.5% M/M) as orders for both vehicles and parts (-1.4% M/M) and non-defence aircraft (-28.9% M/M) fell in June. Also orders for machinery (-2.3% M/M) dropped significantly, while fabricated metals (2.1% M/M), primary metals (1.0% M/M), electrical equipment (0.4% M/M) and computers & electronics (0.2% M/M) rose. Shipments of non-defence capital goods excluding aircraft, which is an important indicator for GDP growth, held up well, rising by 1.0% M/M after a 1.7% M/M increase in May. Durable goods orders excluding transportation rose marginally (0.1% M/M) in June and the previous figure was upwardly revised from 0.6% M/M to 0.7% M/M. At first sight the report looks rather pessimistic, but a closer look at the details shows that the core durables are holding up relatively well despite the slowdown in growth.