Factory orders defied gloomy forecast for June
Orders for U.S. durable goods unexpectedly increased in June, easing concern that companies would limit spending as raw-material costs soared, Bloomberg reported.
The 0.8 percent gain in orders for goods meant to last several years followed a revised 0.1 percent increase in May, the U.S. Commerce Department said today in Washington. The median estimate of economists surveyed by Bloomberg News was for a 0.3 percent decline in orders.
Record exports, fueled by a weakening dollar and economic expansions abroad, are helping U.S. factories withstand the deepening housing slump and slowing demand at home. A separate government report later today is expected to say consumer confidence slumped in July and sales of new homes dropped.
“The manufacturing sector is not showing typical recession-like weakness so far,” James O’Sullivan, senior economist at UBS Securities LLC in Stamford, Conn., said in an interview with Bloomberg Television. “The weight of evidence still suggests the economy is weakening despite this positive number.”
The projected decrease in orders reflected the median estimate of 78 forecasts in a Bloomberg News survey. Estimates ranged from a drop of 2.5 percent to a 1 percent gain.
The gains reflected increasing demand for machinery, metals, autos and defense gear.
Bookings for non-defense capital goods excluding aircraft, a measure of future business investment, climbed 1.4 percent after a 0.1 percent decrease in May. Shipments of those items, which is a figure used in calculating gross domestic product, increased 0.7 percent following a 0.2 percent gain.