Manufacturing slowed in the spring, hobbled by tight fiscal policy and weak global demand, but there are signs it is starting to find some momentum.
Data on Thursday showed a gauge of national factory activity rising to a two-year high in June, driven by a surge in production and new orders.
The Commerce Department report showed factory orders in June were boosted by demand for transportation equipment, with orders there rising 12 percent.
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Orders excluding the volatile transportation category slipped 0.4 percent after rising 1.0 percent in May. Unfilled orders for factory goods jumped 2.1 percent, the largest increase since December 2007, a good sign for future manufacturing activity.
The department also said orders for durable goods, which are manufactured products expected to last three years or more, rose 3.9 percent instead of the 4.2 percent increase reported last week.
Orders for non-defense capital goods excluding aircraft—seen as a measure of business confidence and spending plans—rose 0.9 percent versus a 0.7 increase reported last week.