Orders to U.S. factories rose at the fastest pace in six months in June, reflecting big increases in oil prices and strong demand for military equipment, the government reported Monday. The Commerce Department said that factory orders rose by 1.7 percent in June, the strongest performance since a 1.9 percent increase in December. June's rise was more than double the gain expected by economists. The increase was led by a 5.2 percent jump in orders for primary metals like steel. Orders for defense capital goods rose 16.9 percent, the second consecutive big gain, reflecting strong demand for military equipment to fight in Iraq and Afghanistan. Demand for durable goods—expensive manufactured items expected to last at least three years—rose 0.8 percent in June, while orders for non-durable goods rose 2.5 percent. The increase in non-durable goods was driven by refined petroleum products, reflecting the spike in oil prices. Demand for transportation goods fell by 2.7 percent in June, reflecting a 25 percent drop in demand for commercial aircraft. Orders for cars and trucks rose 2.3 percent following declines in both May and April. U.S. manufacturers have been dealing with the weak U.S. economy, which has particularly hurt automakers and industries connected to the housing sector. However, the weakness has been partially offset for many companies by a jump in U.S. exports due to stronger growth overseas and the declining value of the dollar.
