US factory orders advance 1.8 percent in June

New orders for manufactured goods increased 1.8 percent to $478.5 billion, following a 1.1 percent decrease in May.

Factory orders rebounded a bit in June, a possible sign of firming in the beleaguered manufacturing sector, although some details were more mixed. Oil sector weakness, along with the strong dollar dampening export demand, have been two of the biggest drags on orders. Orders for transportation equipment surged 9.3 per cent in June, reflecting a 65.4 per cent jump in aircraft bookings.

A key category that serves as a proxy for business investment plans edged up 0.7 percent after declines in April and June.

The dollar eased from multi-year highs in June, likely spurring foreign demand for U.S.-made equipment. The lower oil prices have led energy companies to scale back their investment plans. Shipments of these so-called core capital goods, which are used to calculate business equipment spending in the gross domestic product report, increased 0.3 per cent in June.

“We are moving past the very weak period for the manufacturing sector from early on this year, but that activity has yet to meaningfully increase”, said Daniel Silver, an economist at JPMorgan in New York.

Economists are hopeful that overall economic growth will revive further to around 3 percent in the second half of the year as continued gains in employment bolster consumer spending.

Shipments increased a half percent to $240.0 billion, up from a 0.4 percent decrease in May.