US factory orders rise modestly in April

NEW orders for U.S.-manufactured goods increased less than expected in April, but demand for products remains strong, which should help to keep factories humming.

The Commerce Department said on Thursday (Jun 2) that factory orders rose 0.3 per cent in April after advancing 1.8 per cent in March. Economists polled by Reuters had forecast factory orders would rise 0.7 per cent.

Manufacturing, which accounts for 12 per cent of the US economy, is being pinned by still strong demand for goods even as spending shifts back to services. A survey on Wednesday showed the Institute for Supply Management’s national factory activity index rebounded in May after 2 straight monthly declines.

But China’s zero Covid-19 policy and Russia’s dragging war against Ukraine could slow the improvement in supply chains.

In April, there were increases in orders for machinery motor vehicles and primary metals. But orders for electrical equipment, appliances and components fell 0.2 per cent. Orders for computers and electronic products edged up 0.1 per cent.

Shipments of manufactured goods gained 0.2 per cent after accelerating 2.2 per cent in March. Inventories at factories increased 0.6 per cent. Unfilled orders rose 0.5 per cent, matching March’s increase.

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The Commerce Department also reported that orders for non-defence capital goods, excluding aircraft, which are seen as a measure of business spending plans on equipment, increased 0.4 per cent in April instead of 0.3 per cent as reported last month.

Shipments of these so-called core capital goods, which are used to calculate business equipment spending in the gross domestic product (GDP) report, advanced 0.8 per cent in April as reported last month. Robust business spending on equipment helped to shore up domestic demand in the first quarter, even as GDP contracted at a 1.5 per cent annualised rate during that period. REUTERS