U.S. Factory Orders Rose Slightly in June as Demand Stayed Uneven

U.S. factory orders rose modestly in June, while stronger shipments of business equipment offered a more encouraging signal for economic growth. The mixed data showed resilience in investment-heavy industries but did not point to a broad manufacturing rebound.

The U.S. Census Bureau reported on July 27 that new orders for manufactured durable goods increased $1.1 billion, or 0.3%, to $334.8 billion in June. That followed a revised 4.0% decline in May. The June increase was small, and Census says the monthly M3 estimates are based on a panel that is not a probability sample, meaning conventional sampling error cannot be quantified. Relatively minor monthly changes should therefore be interpreted cautiously.

Computers and electronics led the gains

Orders excluding transportation equipment rose 0.6% in June. Within that measure, orders for computers and electronic products increased 3.1% to $31.1 billion. Census said the category had risen in nine of the last 10 months.

Transportation orders can swing sharply because of aircraft and other high-value purchases. Excluding transportation provides another way to examine underlying factory demand, although it does not capture every part of the manufacturing economy.

The June results were uneven across industries. Stronger computer, electronics and related-equipment orders helped lift the durable-goods report, but the overall increase was limited after the sharp May decline.

Business-equipment shipments strengthened

A separate measure followed by economists showed more momentum in business investment. Reuters reported that nondefense capital-goods orders excluding aircraft, a commonly used proxy for business equipment spending, rose 0.9% in June after an upwardly revised 1.9% gain in May.

Shipments of those core capital goods increased 1.9%. Reuters reported that this was the largest monthly increase since December 2021. In plain language, the figures suggest businesses were not only placing orders for equipment but also receiving more of it.

Shipments of core capital goods feed into the equipment-investment portion of gross domestic product, but they are not themselves a direct GDP measure. The data also does not establish that artificial intelligence was the single cause of stronger computer and electronics demand, even though Reuters cited AI-related investment as part of the broader business-spending discussion.

The broader manufacturing picture was softer

The Census Bureau’s full June Manufacturers’ Shipments, Inventories, and Orders report, released August 4, covered manufactured goods more broadly than the advance durable-goods report. It showed total manufactured-goods orders decreased 0.3%, or $2.3 billion, to $656.5 billion.

Shipments fell 0.2%, or $1.1 billion, to $652.1 billion. Inventories rose 0.1% to $962.9 billion, while unfilled orders increased 0.6% to $1.5906 trillion.

Those results help explain why the June data should not be described as a uniform improvement in factory activity. The advance durable-goods report focuses on a subset of manufactured products expected to last at least three years. The full M3 report covers broader manufacturing activity and includes orders, shipments, inventories and backlogs. The two reports answer related but different questions.

How the data fits the economy

The investment signal arrived as the Bureau of Economic Analysis estimated on July 30 that real GDP grew at a 1.5% annual rate in the second quarter of 2026. BEA said increases in consumer spending, investment and exports contributed to growth, while government spending declined. The figure is an advance estimate and can be revised as more information becomes available.

June’s capital-goods shipments are consistent with continued business investment, but one month of factory data cannot determine the direction of the entire economy. The figures also do not directly forecast consumer prices, hiring or household income.

What to watch next

The next important test will be whether July durable-goods orders preserve the June investment signal. The Census Bureau’s release schedule calls for the advance July report on August 26, 2026.

BEA is also scheduled to release its second estimate of second-quarter GDP on August 26. That update will provide an early check on whether the 1.5% growth estimate and its investment contribution change.

For now, the data supports a narrower conclusion: U.S. manufacturing showed continued strength in business equipment, especially computers and electronics, while demand across the wider factory sector remained uneven. That is a picture of resilience concentrated in investment-heavy industries, not a clear rebound across all manufacturing.

Sources

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