New orders at U.S. factories increased by a greater-than-expected 1.7 percent in June, helped by a sharp gain in nondurable goods orders, a Commerce Department report on Monday showed.
Economists polled by Reuters had expected factory orders to gain 0.7 percent in June.
Factory orders in May were revised higher to show a 0.9 percent rise, previously reported as a 0.6 percent advance.
June's increase was the largest since December.
Orders for nondurable goods were up 2.5 percent in June, the Commerce Department said, possibly reflecting higher prices for energy and commodities.
Excluding transportation items, new orders gained 2.3 percent.
Non-defense capital goods orders excluding aircraft, viewed as a good proxy for business investment, rose 1.2 percent in June, slightly down from a previously reported 1.4 percent gain in the month but stronger than the 0.3 percent fall in May.
Durable goods orders for costlier items meant to last three years or longer like washing machines and refrigerators rose 0.8 percent, matching a previously reported gain and were up from a 0.1 percent increase in May.
Transportation orders fell 2.7 percent while orders for automobiles and parts rose 2.3 percent, the Commerce Department data showed.