New orders for US-made goods rebounded in June, recording their biggest increase in eight months, but manufacturing is expected to continue to grow at a moderate pace as the boost from the energy sector fades.
Factory goods orders jumped 3.0 per cent, the Commerce Department said on Thursday. That was the largest gain since October 2016 and followed two straight monthly declines. May’s data was revised to show orders falling 0.3 per cent instead of the previously reported 0.8 per cent drop.
Economists had forecast that factory orders would surge 2.9 per cent in June. Manufacturing, which makes up about 12 per cent of the US economy, has been buoyed by a surge in oil and gas drilling.
But the energy stimulus is easing as ample supplies restrain crude oil prices. At the same time, motor vehicle production is declining as the industry struggles with falling sales, which have created an inventory glut.
Motor vehicle production has decreased for three straight quarters. General Motors Co and Ford Motor Co have both announced they will cut production in the second half of this year. US auto sales fell 6.1 per cent in July from a year ago to a seasonally adjusted rate of 16.73 million units.