US factory orders for durable goods rise 1.1% in July, surpassing forecast

New orders for durable goods in the US climbed 1.1% in July, comfortably topping market expectations and extending what’s looking like a quiet winning streak for American manufacturing.

The number marks a meaningful acceleration from June’s 0.3% gain, which itself was a recovery act following May’s bruising 4.0% decline.

What drove the numbers

The star of July’s report was computers and electronic products, where orders jumped 3.1%.

The data comes from the US Census Bureau’s Manufacturers’ Shipments, Inventories, and Orders survey, better known as the M3. It’s one of those acronyms economists whisper reverently because it feeds directly into GDP estimates, Federal Reserve deliberations, and the general vibe check on whether American factories are humming or stalling.

For context, June’s orders came in at $334.8 billion after revisions. July’s 1.1% bump on top of that suggests the manufacturing base is expanding at a pace that would have seemed unlikely after May’s sharp pullback.

Durable goods, for the uninitiated, are items designed to last three years or more. Think aircraft, heavy machinery, appliances, and yes, computers.

The signal beneath the noise

Transportation equipment orders are famously volatile. A single large aircraft order from Boeing can swing the headline number by a full percentage point in either direction.

That’s why core capital goods orders, specifically non-defense capital goods excluding aircraft, get treated as the purer signal. This measure is essentially a proxy for business investment in productive capacity: new machines, new equipment, new infrastructure.

What the Fed is watching

The Federal Reserve doesn’t set interest rates based on a single durable goods report, but it absolutely factors this data into its broader assessment of economic conditions.

The computer and electronics surge is particularly interesting in this context. Tech spending by businesses tends to correlate with productivity improvements, and the Fed watches productivity growth closely because it determines how fast the economy can grow without generating inflation.

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