A massive surge in defense orders for airplanes, ships and tanks fueled an explosive 5.5 percent increase in new orders for manufactured goods in June, the largest hike in nearly 18 years, the government said Tuesday.
Excluding the defense industry, factory orders rose a healthy 2.7 percent in June, according to the department's Census Bureau.The June surge in factory orders was the steepest since a 6.8 percent hike in December 1970. Defense orders in June rose 78.6 percent, the biggest gain since a 123.2 percent leap in December 1982, the department said.
Orders for manufactured goods in June rose $12 billion to a record $229.8 billion. All figures were adjusted for seasonal variations.
Most of the June increase came in durable goods, up 9.4 percent. The new government report revised a July 26 report that said orders for durable goods jumped 8.8 percent in June.
Orders for non-durable goods rose 1.2 percent in June, the government said.
The 9.4 percent hike in orders for durable goods, big ticket items designed to last at least three years, was the largest since a 10.9 percent jump in December 1982. Durable orders increased $10.8 billion to $125.9 billion with most of the increase in the transportation equipment industry, up $10.1 billion or 35.9 percent to $38.2 billion, the department said.
Orders for aircraft and parts rose $5.2 billion to $12.9 billion while shipbuilding and tank orders increased $4.6 billion to $5.2 billion.
June orders for non-durable goods reached $103.9 billion with a $1.2 billion increase in food, clothing, paper and petroleum products.
Shipments of factory goods in June increased 1.5 percent to $220.6 billion with more than half the increase in durable goods.
Unfilled orders in June increased 2.2 percent to $428.1 billion, the largest increase since a 2.8 percent hike in March 1984. Both durable and non-durable inventories rose in June with durables up 0.4 percent to $224.3 billion and non-durables up 0.6 percent to $120.4 billion.