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Macro EconomyMediumUpdated×3•Originally published 4 May 2026•Updated 6 May 2026•

1 min read

US Factory Orders Surge 1.5% in March as AI Infrastructure Spending Boosts Demand

Key Facts

1US factory orders rose by 1.5% in March, significantly beating the consensus estimate of 0.5%.

2Core capital goods orders excluding aircraft were revised higher to 3.4%, reflecting a surge in AI infrastructure spending.

While US factory orders surged 1.5% in March, the latest labor data reveals unexpected resilience in the private sector. Private employment growth accelerated in April to 109k jobs, significantly exceeding the forecast of 79k. The services sector spearheaded this hiring spree by adding 94k positions, while small businesses contributed 65k jobs to the total. This momentum provides a counter-narrative to earlier concerns of a cooling labor market sparked by a dip in job openings to 6.87 million. Despite the hiring strength, the ISM Services PMI recently dropped to 53.6, while input cost pressures remained steady. Investors are now recalibrating their expectations as the Federal Reserve FED balances robust private payroll growth against a modest 1% annualized GDP growth rate.

28 days ago

Version History

Version 328 days ago

What changed: Updated the story to include April's private sector employment data (ADP), which showed stronger-than-expected growth.

Version 229 days ago

What changed: Updated the story to incorporate new labor market data (JOLTS) showing a decline in job openings and the steady reading of the ISM Services Prices Paid index.

Version 129 days ago

What changed: Updated the narrative to reflect the contrast between manufacturing growth and the services sector slowdown following disappointing PMI data and lower GDP growth estimates.