US factory orders for the month of July 0.9% versus 0.6% expected

Prior month -0.2% revised from -0.3%Factory orders 0.9% versus 0.6% estimate. Durable goods for July 1 .1% versus 1.1% preliminary. Last month 0.5%Durable goods ex defense 1.3% versus 1.3% preliminary. Last month 0.3% Durable goods ex transportation 0.4% versus 0.4% preliminary. Last month 1.1% Durable goods nondefense capital ex air 0.0% versus 0.2% preliminary. Last month 1.7%The July report shows stronger overall demand for U.S. manufactured goods, but a softer signal for business investment. Factory orders beat expectations, although some of the strength came from transportation, while a key measure of equipment investment was revised lower.Here is what the numbers mean:Factory orders: +0.9% versus +0.6% expected. This is the broad measure of orders for manufactured products, including long-lasting goods such as machinery and shorter-lived goods such as food and clothing. June was also revised slightly higher to −0.2% from −0.3%. More orders generally mean more work ahead for factories, supporting production, employment and economic growth. Durable goods orders: +1.1%, unchanged from the preliminary report and above June’s +0.5%. These are products designed to last at least three years, such as vehicles, appliances and machinery. The increase suggests customers are still willing to commit to bigger purchases. However, expensive aircraft orders can cause large monthly swings. Durable goods excluding defense: +1.3%, unchanged from the preliminary reading, versus +0.3% in June. Removing military orders shows that the increase was not dependent on defense spending. However, this category still includes commercial aircraft, so it can be volatile. Durable goods excluding transportation: +0.4%, unchanged from the preliminary reading, versus +1.1% in June. Removing aircraft, vehicles and other transportation equipment helps reveal demand across the rest of manufacturing. Orders continued to grow, but at a slower pace. That makes the underlying picture more modest than the headline suggests. Nondefense capital goods excluding aircraft: unchanged, revised down from +0.2%, following +1.7% in June. This is a closely watched signal of business equipment investment—think machinery and computers. The flat reading suggests businesses paused their expansion in equipment orders after June’s strong increase. It does not mean investment collapsed, but it weakens the growth signal. For the economy: The report is moderately encouraging. Rising orders can translate into increased production, supplier demand and potentially more hiring. However, orders represent intended purchases; actual production and deliveries are what contribute to economic output. These figures also measure dollar values, so higher prices can account for some of the increase. Census Bureau definitionsThe key takeaway is that manufacturing demand improved, but the strength was uneven. The headline beat is positive, while slower growth outside transportation and flat business equipment orders suggest a more cautious outlook for investment. This article was written by Greg Michalowski at investinglive.com.