U.S. Factory Orders Rebound in August, but Core Capex Softer Than First Estimated

U.S. new orders for manufactured goods rose in August, snapping the prior month’s decline, though a key gauge of business investment was revised lower, underscoring a fragile backdrop for industry.

• Factory orders: +1.4% m/m in August (consensus +1.4%) after -1.3% in July; +3.3% y/y.
• Core capital goods orders:* +0.4% m/m, revised down from +0.6%.
• Core capital goods shipments: -0.4% m/m, weaker than the prior -0.3% estimate.

*Non-defense capital goods excluding aircraft — a proxy for equipment spending in GDP.

The release, delayed by the now-ended 43-day federal shutdown, shows manufacturing (about 10.2% of GDP) remains under pressure from import tariffs and subdued global demand. The ISM manufacturing PMI has been in contraction for eight straight months, signaling ongoing softness in factory activity.

Takeaways

With manufacturing still in contraction, the sector is unlikely to provide a major tailwind to near-term growth despite the August bounce.

The headline rebound suggests orders are stabilizing after July’s drop.

The downward revision to core capex and weaker shipments point to softer equipment spending momentum entering Q4.