EL7.AI
Macro EconomyMediumUpdated•Originally published 2 July 2026•Updated 2 July 2026•
2 min read

US Core Factory Orders Hit Strongest Annual Growth Since 2022 Despite Durable Goods Slump

Key Facts

1US factory orders fell by 1.3% in May, performing better than the expected 1.8% decline.
2April factory orders were revised upward to show a 5.3% increase from the previously reported 4.8%.
3Factory orders excluding transportation rose by 1.9%, suggesting resilience in underlying demand.

In a sign of robust underlying industrial demand despite sharp volatility in the transportation sector, latest data revealed a historic divergence in US factory performance. While headline durable goods orders plummeted 4.5% MoM, marking the worst annual decline since November 2024, core durable goods orders (excluding transportation) rose 1.4% monthly. This translates to a 10% annual surge, the strongest yearly growth rate since May 2022, highlighting unexpected resilience in capital investment.

The core factory orders growth of 9.5% YoY represents the best performance since September 2022, reinforcing the narrative that the industrial core remains a pillar for GDP. Compared to global peers, this momentum outpaces industrial production in India, which grew 5.1% annually per market data. Furthermore, with the Dallas Fed Manufacturing Index stabilizing at 0 at the end of June, the headline slump appears increasingly isolated to volatile segments like aerospace and defense.

Investors are now weighing whether this core strength will influence the Federal Reserve's rate path by limiting the urgency for monetary easing. According to the economic calendar, the market is focused on China's Manufacturing PMI release on June 30 to assess external demand. Additionally, US wholesale inventories, which rose 0.3% in May per market data, remain a critical factor for tracking the final Q2 growth estimates.