Orders for long-lasting U.S. manufactured goods rose more than expected in June, pointing to momentum in the economy at the end of the second quarter.
The Commerce Department said on Friday durable goods orders increased 0.7 percent as demand increased from transportation to machinery and computers and electronic products.
Orders for durable goods, items ranging from toasters to aircraft that are meant to last three years or more, were revised to show a slightly bigger 1.0 percent fall in May.
Economists polled by Reuters had forecast orders rising 0.5 percent in June after a previously reported 0.9 percent fall the prior month.
Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, rebounded 1.4 percent after downwardly revised 1.2 percent decline in May.
Economists had expected orders for these so-called core capital goods to increase 0.5 percent.
The signs of increased business investment bode well for stronger economic growth in the second half of the year. The economy performed poorly in the first six months of 2013, hurt by an unusually cold winter.
Core capital goods shipments fell 1.0 percent in June. Shipments of core capital goods are used to calculate equipment spending in the government's GDP measurement. Core capital goods fell 0.1 percent in May and were down in the second quarter, which suggests another quarterly decline in business spending.
Orders for transportation equipment rose 0.6 percent as an increase in bookings for civilian aircraft offset a 2.1 percent drop in orders for automobiles, which was the largest since December.