US Q2 GDP tracking 2.9% after June factory orders

US factory orders rose 1.8% m/m in June, in line with estimate of 1.7% and consensus expectations 1.8%. Orders for durable goods in June, initially estimated in last week's report, were unrevised at the headline level at 3.4% m/m. Nondefense aircraft orders continue to show a 66.1% m/m surge at quarter-end that skewed estimates of aggregate factory demand. At the core level, capital goods orders were revised down modestly in May (-0.8% m/m, initial -0.4%) and June (0.7% m/m, initial: 0.9%).

"The comparable core capital goods shipments series was revised up a bit (0.3% m/m, initial -0.1%). Elsewhere, manufacturers' inventories of durable goods were revised higher in June (0.6% m/m, initial- 0.4%), and nondurable inventories are estimated to have expanded 0.4% m/m (previous- 0.5%)", says Barclays.

Relative to the BEA's assumptions incorporated in last week's advance estimate of Q2 GDP, this morning's data imply a slightly smaller contraction in equipment investment and stronger inventory growth for last quarter. This pushed Q2 GDP tracking estimate up two-tenths, to 2.9%, added Barclays.