US Durable Goods Orders Rise Unexpectedly on Defense Bookings

Orders placed with US factories for durable goods rose unexpectedly in June, fueled by a surge in defense aircraft and pointing to sustained demand for equipment despite rising interest rates. 

Bookings for durable goods -- items meant to last at least three years -- increased 1.9% in June after a 0.8% advance a month earlier, Commerce Department figures showed Wednesday. The figures aren’t adjusted for inflation.

The value of core capital goods orders, a proxy for investment in equipment that excludes aircraft and military hardware, rose 0.5% for a second month.

The median estimates in a Bloomberg survey called for a 0.4% decrease in overall orders. Core equipment bookings were projected to rise 0.2%.

The pickup in orders suggests that firms are continuing to invest despite rising borrowing costs and economic uncertainty. That said, the monthly increase could partially reflect higher prices rather than new investment because the figures aren’t inflation-adjusted.

Written by:  Olivia Rockeman, Writer, for Bloomberg News.