Rise in US factory orders beats expectations in July

WASHINGTON: New orders for U.S. factory goods increased more than expected in July amid a rebound in demand for aircraft.

Factory orders rose ​0.9% after a revised 0.2% drop in June, the Commerce Department's Census Bureau said on Wednesday. Economists polled by Reuters had forecast orders would rebound 0.6% ‌after a ⁠previously ⁠reported 0.3% drop in June.

Orders advanced 6.5% on a year-over-year basis in ​July. Manufacturing, which accounts for 9.4% of the economy, is getting a tailwind ​from the artificial intelligence buildout, though the six-month U.S.-Israeli war with Iran is straining supply chains and keeping input prices elevated. An ​Institute for Supply Management survey on Tuesday ⁠showed manufacturers grumbling ‌about higher prices in August because of ​the war ​and import tariffs, with some describing the economy ⁠as "annoying."


The rebound in factory orders in July was ​led by a 12.7% surge in orders for civilian ​aircraft and parts. Orders for motor vehicle bodies, parts and trailers rose 0.4%. Machinery orders increased 0.8%. Orders for computers and electronic products dropped 1.1%, but were up 14.3% year over year. Orders for electrical equipment, appliances and components fell 0.3%.

The ‌Census Bureau also reported that orders for non-defense capital goods excluding aircraft, which are seen as a ​measure of business spending ​plans on ⁠equipment, were unchanged in July rather than up 0.2%, as reported last week.

Shipments of these so-called core capital goods increased 1.2% instead of ​the initially estimated 1.4%.

The slowdown in core capital goods orders in July is likely temporary. The government last week reported a surge in capital goods imports in July. The AI spending frenzy is also fueling imports and business spending on equipment.