Although manufacturing PMI contracted for the ninth straight month in July, areas of strength continue to boost U.S. manufacturing. PHOTO courtesy Kuka.
U.S. manufacturing is showing strength despite the impact of rising interest rates imposed by the Federal Reserve since March 2022, the latest data from the country’s Commerce Department reveals.
Strong demand for transportation equipment and other goods led to a surge in new orders for U.S.-made goods in June.
Factory orders increased 2.3% after rising 0.4% in May, the Commerce Department noted. On a year-over-year basis June’s surge was 0.9% higher than the same month in 2022.
The Institute for Supply Management earlier this week, however, showed that its manufacturing PMI contracted for the ninth straight month in July. What’s particularly worrisome is that this makes for the longest such stretch since the 2007-2009 Great Recession.
And yet areas of strength remain in U.S. manufacturing. Orders for transportation equipment jumped 12.0% in June after rising 4.2% in the prior month. Civilian aircraft orders soared 69.4%, while motor vehicle orders rose 0.9%. Orders for computers and electronic products increased 1.6%. Electrical equipment, appliances and components orders advanced 1.5%. But machinery orders fell 0.2%.
Overall, shipments of manufactured goods edged up 0.1% in June without a change to the inventory of manufactured goods. Since unfilled orders at factories increased 1.8% during June, this should support increased production.