WASHINGTON (Reuters) - New orders for U.S.-manufactured goods increased more than expected in July, boosted by defense aircraft, but demand elsewhere was moderate amid higher borrowing costs.

Factory orders jumped 5.0% after falling 3.3% in June, the Commerce Department's Census Bureau said on Wednesday. Economists polled by Reuters had forecast factory orders rebounding 4.7%.

Factory orders gained 0.4% year-on-year in July. Defense aircraft and parts orders soared 12.9% after declining 4.8% in June. Excluding transportation, orders rose 0.4% in July after gaining 0.1% in the prior month.

The government also reported that orders for non-defense capital goods excluding aircraft, which are seen as a measure of business spending plans on equipment dipped 0.1% in July as estimated last month.

Shipments of core capital goods decreased 0.3% instead of 0.4% as reported last month.

Nondefense capital goods orders rebounded 42.0%, instead of 41.9% as initially estimated.

Shipments of those goods increased 4.9%, rather than 4.7% as initially estimated. These shipments go into the calculation of the business spending on equipment component in the gross domestic product report.

Business investment in equipment notched double-digit growth in the second quarter despite higher interest rates.