Orders placed with U.S. factories rose in June, pointing to further stabilization in manufacturing that may help lift second-half growth.
The 1.5% gain in bookings followed a revised 3% advance the prior month that was larger than initially reported, the Commerce Department said today in Washington. The median forecast of 60 economists in a Bloomberg survey called for a 2.3% increase. Demand for durable goods, those meant to last at least three years, rose 3.9%, down from figures reported last week.
Higher sales of automobiles and sustained demand in the housing industry, even as mortgage rates rise, are helping factories overcome weakness in orders from overseas. More progress in the labor market that added 162,000 jobs last month may be needed to convince consumers to spend more, supporting manufacturing and the expansion through the end of the year.
“Demand for manufactured goods has started to pick up in recent months, allaying concerns that manufacturing activity could be stalling,” Ryan Wang, an economist at HSBC Securities USA Inc. in New York, said in a research note before the report. The recent rise in orders is “pointing to stronger activity in the months ahead.”
The department said the level of orders in June reached the highest since records began in 1992.
The 162,000 rise in payrolls in July was the smallest in four months and followed a revised 188,000 rise in June that was less than initially estimated, according to a report from the Labor Department this morning. The unemployment rate declined to 7.4% from 7.6%.
Estimates in the Bloomberg survey ranged from factory order gains of 0.6% to 5% after a previously reported 2.1% advance in May.
Bookings for commercial aircraft rose 32.1% after climbing 67.6% in May. Chicago-based Boeing Co. said it received 287 aircraft orders in June, up from 232 the previous month.
Orders for non-durable goods including petroleum fell 0.6%. The drop in non-durables reflected decreases in tobacco products and agriculture chemicals.