U.S. Factory Orders Increase in July

WASHINGTON (Reuters) – New orders for U.S.-manufactured goods increased more than expected in July, boosted by defense aircraft, although demand elsewhere was moderate amid higher borrowing costs.

Factory orders jumped 5.0% after falling 3.3% in June, according to the Commerce Department’s Census Bureau, which reported on Wednesday. Economists polled by Reuters had forecast a 4.7% rebound in factory orders.

Factory orders gained 0.4% year-on-year in July. Orders for defense aircraft and parts soared 12.9% after a 4.8% decline in June. Excluding transportation, orders rose 0.4% in July after gaining 0.1% in the prior month.

The government also reported that orders for non-defense capital goods excluding aircraft, seen as a measure of business spending on equipment, dipped 0.1% in July as estimated last month.

Shipments of core capital goods decreased 0.3%, an improvement from the 0.4% drop reported last month.

Non-defense capital goods orders rebounded 42.0%, slightly higher than the 41.9% initially estimated. Shipments of these goods increased 4.9%, rather than the previously estimated 4.7%. These shipments are key to calculating the business spending on equipment component in the gross domestic product report.

Business investment in equipment achieved double-digit growth in the second quarter despite the impact of higher interest rates.