WASHINGTON – New orders at U.S. factories rose by a less-than-expected 0.6 percent in June and fell somewhat once the volatile transportation component was stripped away, government data on Thursday showed.
Analysts polled by Reuters expected orders to mount 1.0 percent in June from an unrevised 0.5 percent fall the previous month. Economists are watching manufacturing carefully for clues about the sector's resilience, which has helped to offset weakness in the U.S. housing market.
June nondefense capital goods orders excluding aircraft, viewed as a good proxy for business spending, were unchanged, which was slightly better than a 0.7 percent decline seen in an earlier estimate by the government last week.
"The best thing about the report is that the core reading, nondefense capital orders, was revised higher. This suggests a slightly upward revision, about a tenth of percentage point to second quarter GDP," said Michelle Meyer, an economist with Lehman Brothers in New York.
Transportation equipment orders, a volatile category whose monthly performance is heavily influenced by aircraft orders, increased by 7.1 percent in June.
Excluding transportation, factory orders declined 0.5 percent. This was the first outright fall since January, when they shrank by 2.5 percent, with the category's June performance hurt by a 3.6 percent drop in computers and electronic products and a 6.1 percent fall in primary metals.
June durable goods orders were revised to show a 1.3 percent increase, versus a 1.4 percent advance estimated by the government last week.
The inventory-to-shipments ratio, a measure of how many months' supply it would take to deplete stockpiles at the current rate of sales, edged up to 1.25 in June from 1.24 the previous month.