U.S. Factory Orders
The stronger US dollar has been hurting business investments and export sales over the last two years.

Total factory orders, a major focus of US enterprises which monitor investments, recorded a minor improvement against economist expectations in June following two months of drops, the Department of Commerce said on Thursday.

The government publishes an advance valuation of durable commodities a week prior to the publication of the complete report on factory orders. According to the data, economists responding to a Market Watch Survey were expecting orders to slip 1.7 percent.

Factory orders covering business investments went up 0.4 percent in June after falling 0.4 percent and 0.9 percent in May and April respectively. The total number of orders slipped 1.5 percent after a decrease of 1.2 percent two months ago. This was the most significant drop of factory orders following a drop of 9 percent in February.

The manufacturing sector was hard-pressed during the previous year as a result of the weak global economy as well as the strong US dollar which hurt business investments and export sales. Meanwhile, investments were affected by large reductions courtesy of energy corporations in the midst of falling crude oil prices.

Orders for gas, oil field and mining equipment performed strongly in June with an increase of 208 percent although the large gain produced a decrease in demand by 62 percent from January to June of 2016. The minimal 0.4 percent growth of investments covering non-defense capital commodities but not including aircraft was the only positive outcome in the category since the 0.3 percent increase last March. It was, so far, the strongest performance since the 2.4 percent at the start of this year.

Orders for durable items including airplanes and household appliances plummeted 3.9 percent while non-durable goods (chemicals, food and paper) increased only 1 percent. Commercial aircraft orders also fell 58.8 percent in June while demand for cars and car parts rose 3.2 percent. Transportation equipment orders dropped 10.5 percent in June.

The Institute for Supply Management (ISM) said early this week the measure of manufacturing activity increased for the fifth consecutive month last month. However, the 52.6 reading was slightly behind compared to the 53.2 in June. Readings higher than the 50 mark indicate growth in the industry.

According to an economist from Jefferies, Tom Simmons, the factory segment is experiencing a blackout which started during the last quarter of 2014. Business investments have been negative for three successive quarters.