WASHINGTON — America's factories saw orders grow stronger in June, a spot of good news for manufacturers and for the economic recovery.
The Commerce Department reported Wednesday that orders placed with U.S. factories rose by a solid 0.7 percent in June from the previous month. The performance exceeded economists' expectations for a 0.5 percent advance.
The increase, the largest since March, was up from a 0.4 percent rise in May.
"Manufacturing looks quite healthy for the reason that its big demand drivers — business investment and exports — at the moment are operating at a higher gear," said Clifford Waldman, economist at Manufacturers Alliance/MAPI, a research group.
On Wall Street, the Dow Jones industrials gained 6.27 points to close at 10,126.51.
Orders for "durable" goods, costly manufactured items expected to last at least three years, posted a 0.9 percent increase in June, a turnaround from the 0.9 percent drop the month before.
Demand for machinery, fabricated metal products, airplanes for the military and electrical equipment were among the categories of durable goods showing gains in June.
For nondurable goods, such as food, orders rose by 0.5 percent in June, following a strong 2 percent increase in May. Meat, poultry and seafood products, chemicals, and plastics and rubber goods were among the categories posting increases in orders for June.
There were spots of weakness in the report. Orders for cars, computers and household appliances were among the categories showing declines.
The Federal Reserve meets next week, and many economists are predicting policymakers will boost short-term interest rates by one-quarter percentage point, which would mark the second rate increase this year. The Fed on June 30 pushed up a key rate to 1.25 percent, from a 46-year low of 1 percent. It marked the first rate rise in four years and was aimed at making sure that inflation doesn't become a problem for the economy, which is on a solid recovery path despite hitting some potholes in June.
Treasury Secretary John Snow, in a visit to Wall Street on Wednesday, said the economy is on the right path for growth. The economy and the availability of jobs have been hot topics for President Bush and his Democratic rival, John Kerry, on the presidential campaign trail.
National Association of Manufacturers executive vice president Michael Baroody said Wednesday's report buttresses the notion that "the manufacturing recovery remains on track" and "should offer some solace to those who fear that our economy is losing steam."