US Core Factory Orders Unexpectedly Plunge Most In A Year

Despite the latest Manufacturing PMI surging to four year highs, US Factory Orders unexpectedly dropped in June (-0.3% MoM vs +0.2% MoM expected). This is the second monthly decline in the headline print in a row, but orders remain up 7.4% YoY…

Source: Bloomberg

Worse still, Core Factory Orders (excluding Transports), dropped 0.4% MoM (dramatically missing expectations of a 0.4% MoM rise). This is the first monthly drop since October and biggest MoM decline since April 2025…

Source: Bloomberg

Orders Ex-Defense also tumbled 0.4% MoM, down for the second month in a row.

So while the soft survey data is positive, the hard data is deteriorating.

The reason for that is a familiar one in this bifurcated economy, as we showed from ISM’s respondents…

• Green ones from AI, semiconductor, electronics and machinery firms report strong demand from AI data centers, chips and defense.

• Red ones from metals, transportation, chemicals and consumer-related sectors report weak demand, tariffs, higher costs, geopolitical risks and pricing chaos.

Simply put, the AI supply chain is booming, Defense is enthused; the rest is not.