The latest indication that the slowdown brought on by interest rate hikes in the manufacturing sector has ended is a significantly larger increase in orders for items made in the United States than anticipated in August.
The Commerce Department said on Wednesday that factory orders increased 1.2 percent in August. In response to the prior month's loss of 2.1 percent, which was mostly caused by a sharp decline in the volatile civilian aircraft category, economists had predicted a lower increase of 0.3 percent.
Orders increased by 1.4 percent in August, up from a gain of 0.9 percent in July, which was revised up two-tenths of a percentage point.
It also went up by 0.8 percent when defense was excluded.
Orders for capital items other than those for the military increased by 0.7 percent. This group is used as a stand-in for corporate investment.
With July marking the only recent drop, new orders for manufactured products have increased in five of the last six months.
Better than anticipated, durable goods orders increased 0.2 percent to $284.7 billion. Orders for durable goods are up 4.2 percent for the year. The month-over-month gain was led by orders for fabricated metal products, which increased 0.6 percent and were up six of the previous seven months.
Factory orders appear to once again be significantly influenced by U.S. assistance for Ukraine. Defense aircraft orders increased 19.2 percent in August and are up 13.2 percent from a year ago.
Yet there is also an increase in demand for civic items. In August, orders for home appliances increased by 3.6 percent, and they are up 5.5 percent from a year earlier, indicating strong consumer demand.
Industrial machinery orders increased by 5.1 percent. Orders for mining and drilling equipment were up 1.9 percent, likely reflecting the increase in oil prices.
Orders for vehicles and their components increased by 0.3%, bringing them up by 4% over the previous year.
Orders for nondurable products reached $301.4 billion, up 2.1 percent. Foods and fuels are included in this category, and the increase may be due to an increase in gasoline prices in August.
Since the figures are not adjusted for inflation, some rises may be the result of higher prices rather than an increase in demand for the products.
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