A report released by the Commerce Department on Thursday showed a much stronger than expected rebound in new orders for U.S. manufactured durable goods in the month of June, although the report also showed a much steeper than previously reported drop in orders in May.
The Commerce Department said durable goods orders spiked by 2.0 percent in June after plunging by a revised 2.3 percent in May.
Economists had expected durable goods to climb by 0.7 percent compared to the 1.3 percent slump originally reported for the previous month.
The rebound in durable goods orders received a boost from a turnaround in orders for transportation equipment, which surged up by 3.8 percent in June after tumbling by 7.5 percent in May.
Orders for non-defense aircraft and parts soared by 75.5 percent in June after plummeting by 52.2 percent in May, while orders for motor vehicles and parts also showed a significant increase.
Excluding the rebound in orders for transportation equipment, durable goods orders still jumped by 1.2 percent in June after rising by 0.5 percent in May. Ex-transportation orders had been expected to edge up by 0.2 percent.
Orders for machinery and fabricated metal products showed notable increases, while orders for primary metals and computers and electronic products also moved to the upside.
The report also said orders for non-defense capital goods excluding aircraft, an indicator of business spending, shot up by 1.9 percent in June after edging up by 0.3 percent in May,
"Nevertheless, with the incoming global data still deteriorating and domestic capacity utilization falling, we still expect overall investment to remain weak in the second half of the year," said Michael Pearce, Senior U.S. Economist at Capital Economics.
Shipments in the same category, which is the source data for equipment investment in GDP, climbed by 0.6 percent in June following a 0.5 percent increase in May.