Factory orders surprise rise
Government reports new U.S. factory orders unexpectedly rose 0.4% in June after a 1.1% jump the month prior.
WASHINGTON (Reuters) -- New orders received by U.S. factories unexpectedly rose in June, government data showed on Wednesday, advancing for a third straight month and raising cautious hopes of a turnaround for the recession-hit economy.
The Commerce Department said factory orders climbed 0.4% in June after increasing by a revised 1.1% in May, previously reported as a 1.2% rise.
Economists polled by Reuters had expected factory orders to fall 1% in June from the prior month.
While factory orders data were strong, reports on the services sector and the labor market were weaker.
"The general theme is that the restocking is basically better than expected with factory orders," said Doug Roberts, chief investment strategist at Channel Capital Research in Shrewsbury, New Jersey.
"With factory orders, we've been a service-oriented economy, so a restocking if there's no ultimate demand at the other end, can be temporary and non-sustainable. So that's the big concern right now."
Excluding transportation items, factory orders surged 2.3% in June from May's 0.9% advance. Shipments of manufactured goods rebounded 1.4% in June, breaking 10 straight months of declines, the department said. Shipments fell 0.8% in May.
Inventories of manufactured goods fell 0.8% in June, matching the drop in May.
"The fact is the U.S. economy is improving, but is that a surprise? No, it's not considering where we were at the beginning of the year. The question is how quickly we can recover and how sustainable is that recovery," said Joe Trevisani, chief market analyst at FX Solutions in Ridgewood, New Jersey.
Orders for costly manufactured durable goods -- items like cars and refrigerators intended to last longer -- were down 2.2% in June instead of the 2.5% drop previously reported. That followed a 1.3%rise in May.
Shipments of manufactured durable goods fell 0.1% in June, dropping for the 11th consecutive month, instead of the previously reported 0.2% decrease. Inventories of manufactured durable goods fell 1.2% in June compared to the 0.9% drop previously reported. 
