US Factories Receive More Orders in May
U.S. factories received more orders from companies in May than in April. Orders included computers, machinery, and other equipment. This increase follows two straight months of decline. Factory orders increased 0.7 in May from April.
Core capital goods which include computers and machinery rose 2.1 percent. Original estimates for the month were at 1.6 percent as preliminary reported a week ago. Orders for durable goods which include everything from airplanes to refrigerators rose 1.3 percent in May. Non-durable goods which include food, paper, chemicals and energy products edged up 0.2 percent.
Although there is some optimism with the latest report, factory orders are down from the start of the year. Manufacturing activity shrank in June for the first time in three years. This may be an effect of the weaker European market and its impact on the US economy. The demand for United States exports has slowed in countries such as China, which rely on equipment, machinery, and vehicles from US factories. According to a report from the Institute of Supply Management, orders are likely to decline in June as well. Factory prodcution and exports declined and a measure of new orders declined. All are an indication consumers and businesses are less confident in the economy.
On the job front, employers added an average of 73,000 jobs in April and May. This was significantly down from the 226,000 jobs added in January through March. Economists forecast employers added just 90,000 jobs last month with no change in the unemployment rate. Overall manufacturers have reported job gains for eight straight months.