According to the Commerce Department, orders for long-lasting goods rose 2% in July compared with the 0.6% reading analysts had forecast.
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Transportation orders were a leading driver of July’s gain, increasing 4.7% on the month. Transportation equipment was up for the second straight month, up $3.8 billion to $83.2 billion in July. A survey of supply-chain executives conducted by the Institute for Supply Management found US manufacturing expanded at a slower pace in July than in June.
“The revisions to June data for core capital goods shipments suggest a bit more equipment investment in Q2”.
While the July increase is encouraging, U.S. manufacturers still face a host of problems from a stronger dollar to falling oil prices and turbulence in China, the world’s second biggest economy. Durable goods inventories were unchanged after rising 0.4 percent in June.
The report said orders for motor vehicles and parts jumped by 4.0 percent, while orders for aircraft and parts gave back ground after spiking higher in the previous month. In contrast, primary metals (down 0.9 percent), machinery (down 0.2 percent) and computers and electronic products (down 0.1 percent) had reduced shipments for the month.
The June rise was much stronger than previously estimated, 4.1 percent rather the 3.4 percent gain originally reported.
Next Wednesday, the Commerce Department is scheduled to release a separate report on factory orders in the month of July.
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Prior ex transport revised to +1.0% from +0.6%. Excluding defense, another volatile sector, orders rose 1%.
