Key Takeaways:
US factory orders surged in April, posting their largest monthly gain in 11 months on strong aircraft demand.
New orders for U.S. factory goods rose more than expected in April, posting their largest increase in 11 months, as demand for commercial aircraft and other goods accelerated, Census Bureau data showed Wednesday.
The April reading exceeded the median estimate in a Bloomberg survey of economists, according to the report. Factory orders had been subdued in recent months as elevated borrowing costs weighed on business investment, making the breadth of the April rebound notable.
The gain was led by a surge in commercial aircraft orders, a category known for monthly volatility. Excluding transportation equipment, factory orders also posted a solid increase, signaling demand was broad-based across manufacturing industries including machinery, fabricated metals and electrical equipment.
The April increase was the largest since May 2025, when orders last reached a comparable level. The data suggests the manufacturing sector is gaining traction after a period of subdued activity that began in late 2025, when the Federal Reserve's rate hiking cycle peaked.
The factory orders report adds to evidence that the U.S. economy can withstand current interest rate levels, potentially giving the Federal Reserve more room to maintain its policy stance when it meets June 17-18. The last time factory orders posted a comparable gain in May 2025, the S&P 500 rose 2.3% in the following month while the 10-year Treasury yield climbed 12 basis points.
The strength in U.S. manufacturing contrasts with weakness abroad. China's official manufacturing PMI fell to exactly 50 in May, the lowest since February, as the world's second-largest economy faces headwinds from the ongoing energy crisis and persistent domestic demand problems, data from the National Bureau of Statistics showed.
The next U.S. factory orders report, covering May, is scheduled for release in early July. Economists will watch for whether the April surge represents the start of a sustained recovery or a one-off boost from aircraft orders.
This article is for informational purposes only and does not constitute investment advice.
