US factory orders fall for the second consecutive month in June

Factory orders in the United States fell for the straight month in a row during the month of June, following weak demand for transportation equipments and capital goods; however, signs of stabilization in business spending offered some hope for struggling industries.

New factory orders for manufactured goods declined 1.5 percent after a downwardly revised 1.2 percent decrease in May, data released by the US Commerce Department showed Friday. Economists polled by Reuters had forecasted factory orders to drop 1.8 percent in June after a previously reported 1.0 percent decline in May.

In June, orders for transportation equipment tumbled 10.5 percent, the biggest drop since August 2014, largely affecting orders for aircraft. Orders for motor vehicles and parts increased 3.2 percent, the largest gain since July 2015.

The department also said orders for non-defense capital goods excluding aircraft increased 0.4 percent in June instead of the 0.2 percent gain reported last month. These so-called core capital goods are seen as a measure of business confidence and spending plans on equipment.

Manufacturing that constitutes about 12 percent of the US economy has remained under pressure following a strong dollar amid weak overseas demand. This, in turn, has led to mounting inventory pressure, hurting production largely.

Meanwhile, orders for machinery, which have been hurt by weak demand in the energy and agricultural sectors, rose 0.2 percent. Orders for electrical equipment, appliances and components gained 0.3 percent. Orders for computers and electronic products slumped 1.9 percent, the largest drop in more than a year.