US factory orders fell 4.8% in June, erasing more than half of May’s tariff front-running 8.3% surge and marking the sharpest month-over-month decline since the pandemic lockdowns in April 2020.
The pullback was widely anticipated—economists had penciled in the retreat in the same level—but the scale still underscores how volatile headline demand has become.
The retreat was almost entirely driven by transportation demand. Orders for transportation equipment tumbled 22.4% after an eye-watering 48.5% jump the month before, reversing the spike in Boeing and other aircraft bookings that had propelled May’s headline figure.
Non-defense aircraft orders alone slid to $28.9 billion—roughly half of May’s record—but remain well above 2024 levels.
Strip out transportation and the picture steadies: Core factory orders rose 0.4% month-over-month, the second straight gain, while year-on-year growth excluding transportation improved to 1.3%.
June’s setback leaves total orders 5.6% higher than a year earlier, but momentum is fragile. Shipments eked out a 0.5% increase while unfilled orders climbed 1.0%, extending an 11-month streak, and inventories edged 0.2% higher.
Manufacturers—still just 10% of overall GDP—remain squeezed by the lingering tariff regime. An Institute for Supply Management survey released Friday showed factory activity sinking to a nine-month low, and President Donald Trump’s latest tariff salvo continues to squeeze imported inputs.
June’s drop is the mirror image of May’s jet-fuelled leap—the second-largest monthly jump in 69 years—underscoring how headline series can exaggerate extremes when one subsector does the heavy lifting.
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