Factory orders rose by a respectable 2.3% in June, the fourth straight month of expansion and close to the record high seen a year ago, according to new Census Bureau data.
The details: Durable goods increased 4.6% to a record high, mostly thanks to a huge leap in orders for nondefense aircraft and parts.
- Excluding transportation, factory orders only rose 0.2%, the first increase since January.
- Overall, orders have inched down 0.2% from their high point in June 2022, while orders excluding transportation are down 4.9% over the past year to date.
- Lastly, orders for core capital goods (nondefense capital goods except aircraft) rose by a mere 0.1% in June, just barely hitting a record. This metric is used as a proxy for capital spending in the U.S. economy.
In better news . . . Manufacturing labor productivity has bounced back after three quarters of decline, rising 4.0% at the annual rate in Q2, according to the Bureau of Labor Statistics. It’s the best quarterly result in two years.
- Output is also back on the upswing, rising 1.9% after two quarters of decline.
- Lastly, unit labor costs rose 3.6%, the ninth straight quarter of increases.
However, manufacturing still faces challenges, with the ISM® Manufacturing Purchasing Managers’ Index® showing that the industry contracted in July for the ninth straight month.