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US factory orders fall for second straight month
[WASHINGTON] New orders for US-made goods fell for a second straight month May while shipments barely rose, pointing to continued weakness in manufacturing.
Factory goods orders decreased 0.7 per cent, weighed down by weak demand for transportation equipment, the Commerce Department said on Wednesday. Data for April was revised sharply down to show factory orders falling 1.2 per cent instead of slipping 0.8 per cent as previously reported.
Economists polled by Reuters had forecast factory orders falling 0.5 per cent in May. Factory orders rose 0.9 per cent compared to May 2018. Manufacturing, which accounts for about 12 per cent of the economy, is struggling amid an inventory bloat, trade tensions between the United States and China, and a reduction in the production of Boeing's 737 MAX aircraft. The weak factory orders data was flagged by a report last month showing the second straight monthly drop in demand for long-lasting manufactured goods in April, as well as a drop in manufacturing production.
A survey on Monday showed a measure of national factory activity dropped to a near three-year low in June, with manufacturers expressing concern over the US-China trade tensions. Transportation equipment orders dropped 4.6 per cent in May after tumbling 7.6 per cent in April. Orders for civilian aircraft and parts declined 28.2 per cent. There were increases in order for computers and electronic products and machinery.
The Commerce Department also said May orders for non-defence capital goods excluding aircraft, which are seen as a measure of business spending plans on equipment, rose 0.5 per cent instead of the 0.4 per cent gain reported last month.
Shipments of core capital goods, which are used to calculate business equipment spending in the gross domestic product report, increased 0.6 per cent in May instead of 0.7 per cent as previously reported. Overall shipments of manufactured goods edged up 0.1 per cent in May after dropping 0.6 per cent in April.