New orders for long-lasting U.S. manufactured goods rose more than expected in July, posting their biggest gain in two years, according to a government report on Wednesday that offered more evidence a modest economic recovery was probably starting to take shape.

Durable goods orders jumped 4.9 percent, the largest advance since July 2007, after falling by a revised 1.3 percent in June, previously reported as a 2.2 percent drop, the Commerce Department said.

Analysts polled by Reuters had forecast orders rising 3 percent in July. However, compared to the same period last year, new orders were still down 25.8 percent.

(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama)