U.S. Factory Orders Fall in July, the Third M/M Decline in Four Months
Summary
- Headline: -1.3% m/m; +1.6% y/y, the smallest y/y gain in three months.
- Durable goods orders (-2.8%) down, but nondurable goods orders (+0.3%) and shipments (+0.9%) both up three straight months.
- Transportation equipt. orders -9.5% m/m, w/ a 32.7% drop in nondefense aircraft & parts orders.
- Unfilled orders unchanged after two successive m/m increases.
- Inventories +0.3%, the third consecutive m/m rise.
Total factory orders fell 1.3% m/m in July after a 4.8% drop in June and an 8.3% gain in May, data from the U.S. Census Bureau showed. A 1.4% m/m July decline had been expected in the Action Economics Forecast Survey. The July reading marked the third m/m fall in four months following a string of m/m gains between December 2024 and March 2025. The year-on-year rate of increase decelerated to 1.6% in July from 5.6% in June, registering the smallest y/y rate in three months but higher than 1.2% y/y in July 2024. Notably, orders for nondefense aircraft & parts dropped 32.7% m/m in July following a 52.7% plunge in June and an exceptional 231.6% spike in May. Factory orders excluding defense fell 1.1% (+1.5% y/y), down for the third month in four, after a 4.7% June decrease. Factory orders excluding the transportation sector grew 0.6% (1.5% y/y), the largest of three straight m/m increases, after a 0.4% June rise.
Durable goods orders fell 2.8% (+3.4% y/y) in July, down for the third month in four, after a 9.4% decrease in June (matching -2.8% m/m in the advance report on August 26). The July fall reflected m/m orders drops of 9.5% (the third m/m decline in four months; +2.5% y/y) in transportation equipment and 0.3% (+0.4% y/y) in furniture & related products. To the upside, the following durable goods orders rose m/m in July: electrical equipment, appliances & components (1.9%; 8.5% y/y), machinery (1.9%; 5.7% y/y), primary metals (1.6%; 4.2% y/y), fabricated metal products (0.7%; 3.5% y/y), and computers & electronic products (0.5%; 4.7% y/y).
Nondurable goods orders, which equal nondurable goods shipments, rose 0.3% (-0.1% y/y) in July, the third successive m/m rise, after a 0.4% gain in June. The July rise reflected m/m increases of 2.3% (2.9% y/y) in textile mills, 0.8% (-3.6% y/y) in apparel, 0.5% (0.6% y/y) in plastics & rubber products, 0.4% (-6.1% y/y) in petroleum & coal products, 0.3% (3.3% y/y) beverage & tobacco products, 0.3% (3.1% y/y) in chemical products, 0.2% (0.4% y/y) in paper products, and 0.1% (0.1% y/y) in food products. To the downside, the following nondurable goods shipments declined m/m in July: leather & allied products (-3.2%; -7.0% y/y), textile products (-0.3%; +1.7% y/y), and printing (-0.1%; +0.4% y/y).
Total shipments grew 0.9% (1.8% y/y) in July, the largest of three consecutive m/m gains, after a 0.6% increase in June. Excluding transportation, shipments rose 0.6% (1.5% y/y) in July after a 0.5% June rise. Shipments of durable goods industries advanced 1.5% (3.7% y/y) in July, the biggest of eight straight m/m increases, on top of a 0.7% rise in June. This reflected m/m durable goods shipments increases of 2.5% (3.7% y/y) in transportation equipment, 1.6% (3.4% y/y) in fabricated metal products, 1.4% (6.4% y/y) in electrical equipment, appliances & components, 1.4% (4.3% y/y) in machinery, 1.3% (5.4% y/y) in primary metals, 0.9% (2.5% y/y) in miscellaneous durable goods, 0.7% (1.1% y/y) in nonmetallic mineral products, and 0.2% (5.8% y/y) in computers & electronic products. Durable goods shipments for furniture & related products were the only category with a monthly decline in July; they slid 0.5%, the third m/m slide in four months, after a 0.3% June decline. Meanwhile, durable goods shipments for wood products were virtually unchanged m/m (-1.7% y/y) following a 0.1% June uptick.
Unfilled orders held steady m/m (7.0% y/y) in July after rises of 0.9% in June and 3.4% in May. Excluding transportation, unfilled orders were virtually unchanged m/m (0.8% y/y) for the second successive month. Backlogs of durable goods held steady m/m (7.0% y/y) in July, reflecting m/m increases of 0.4% (1.5% y/y) in primary metals and 0.3% (1.7% y/y) in electrical equipment, appliances & components, partly offset by a 0.3% decline (-0.1% y/y) in furniture & related products.
Inventories rose 0.3% (1.5% y/y) in July, up for the third straight month, after a 0.2% increase in June. Excluding transportation, inventories rose 0.3% (1.4% y/y) after a 0.3% June rise. Durable goods inventories were up 0.3% (1.9% y/y) in July after rising 0.2% in June and May, while nondurable goods inventories grew 0.2% (0.8% y/y) following a 0.2% June increase and two successive m/m declines.
The factory sector data are available in Haver’s USECON database. The Action Economics Forecast Survey is in the AS1REPNA database.
Winnie Tapasanun
AuthorMore in Author Profile »Winnie Tapasanun has been working for Haver Analytics since 2013. She has 20+ years of working in the financial services industry. As Vice President and Economic Analyst at Globicus International, Inc., a New York-based company specializing in macroeconomics and financial markets, Winnie oversaw the company’s business operations, managed financial and economic data, and wrote daily reports on macroeconomics and financial markets. Prior to working at Globicus, she was Investment Promotion Officer at the New York Office of the Thailand Board of Investment (BOI) where she wrote monthly reports on the U.S. economic outlook, wrote reports on the outlook of key U.S. industries, and assisted investors on doing business and investment in Thailand. Prior to joining the BOI, she was Adjunct Professor teaching International Political Economy/International Relations at the City College of New York. Prior to her teaching experience at the CCNY, Winnie successfully completed internships at the United Nations. Winnie holds an MA Degree from Long Island University, New York. She also did graduate studies at Columbia University in the City of New York and doctoral requirements at the Graduate Center of the City University of New York. Her areas of specialization are international political economy, macroeconomics, financial markets, political economy, international relations, and business development/business strategy. Her regional specialization includes, but not limited to, Southeast Asia and East Asia. Winnie is bilingual in English and Thai with competency in French. She loves to travel (~30 countries) to better understand each country’s unique economy, fascinating culture and people as well as the global economy as a whole.
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