US Q2 GDP tracking 2.9% after June factory orders

US factory orders rose 1.8% m/m in June. Orders for durable goods in June, initially estimated in last week's report, were unrevised at the headline level at 3.4% m/m. 

Nondefense aircraft orders continue to show a 66.1% m/m surge at quarter-end that skewed estimates of aggregate factory demand. At the core level, capital goods orders were revised down modestly in May (-0.8% m/m, initial: -0.4%) and June (0.7% m/m, initial: 0.9%). 

While orders now show less of a rebound in June, the comparable core capital goods shipments series was revised up a bit (0.3% m/m, initial: -0.1%). Elsewhere, manufacturers' inventories of durable goods were revised higher in June (0.6% m/m, initial: 0.4%), and nondurable inventories are estimated to have expanded 0.4% m/m (previous: 0.5%).

"Relative to the BEA's assumptions incorporated in last week's advance estimate of Q2 GDP, this morning's data imply a slightly smaller contraction in equipment investment and stronger inventory growth for last quarter. This pushed the Q2 GDP tracking estimate up two-tenths, to 2.9%", says Barclays.