U.S. Durable-Goods Orders Jump Most in 10 Months as Manufacturers Rebound

New orders for manufactured durable goods rise by 2% in June, the fastest in 10 months, the U.S. Census Bureau reports. Economists had projected an increase of just 0.8%.
By Bradley Keoun ,

U.S. factories in June reported an unexpected quick acceleration in new orders for long-lasting machinery and equipment, adding to signs that the economy might be picking up as the Federal Reserve moves toward a likely cut next week in U.S. interest rates.

New orders for manufactured durable goods rose by 2% to $246 billion, the U.S. Census Bureau reported Thursday in a statement. Economists, on average, had expected a gain of just 0.8%, following a revised 2.3% decline in May.

The monthly durable-goods report is a key indicator of how busy factories will be in the future, and a slew of data earlier this year had suggested that manufacturers were cutting back amid signs that the U.S. economy was slowing.

But non-manufacturers appear sanguine enough to committing to more capital spending, according to Ian Shepherdson, chief economist at the forecasting firm Pantheon.

"The clear implication is that capital spending by non-manufacturers, who account for some 80% of investment, is much stronger than in the manufacturing sector," Shepherdson wrote Thursday in a report.   

Excluding transportation equipment, which can vary widely from month to month because of big aircraft purchases, new durable-goods orders rose 1.2%, also ahead of economists' projections for a 0.2% increase. 

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