US factory orders rise more than expected in May
Add BT as a preferred source
NEW orders for US-manufactured goods increased more than expected in May, bucking a slew of recent data showing a softening in the economy and underscoring that demand for products remains strong even as the Federal Reserve aggressively tightens financial conditions.
The Commerce Department said on Tuesday that factory orders rose 1.6 per cent in May after advancing 0.7 per cent in April. Economists polled by Reuters had forecast factory orders would rise 0.5 per cent.
Other indicators have shown less resilience. A survey on Friday showed the Institute for Supply Management’s national factory activity index contracted for a second straight month, though an “overwhelming majority” of companies indicated they were hiring.
That followed moderate consumer spending growth in May along with weak housing starts, building permits and factory production.
Manufacturing accounts for 12 per cent of the US economy and is being held up by strong demand for goods even as overall spending rotates more toward the services sector. The US central bank is seeking to cool demand across the economy as it tries to tamp down high inflation.
In May, there were increases in orders for primary metals, machinery and transportation equipment, among others. Orders for computers and electronic products also rose 0.5 per cent. But orders for electrical equipment, appliances and components declined 1.0 per cent.
Navigate Asia in
a new global order
Get the insights delivered to your inbox.
Shipments of manufactured goods gained 1.8 per cent after accelerating 0.6 per cent in April. Inventories at factories increased 1.3 per cent. Unfilled orders rose 0.4 per cent in May compared to a gain of 0.5 per cent in April.
The Commerce Department also reported that orders for non-defense capital goods excluding aircraft, which are seen as a measure of business spending plans on equipment, increased 0.6 per cent in May instead of 0.5 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 report, advanced 0.8 per cent in May, the same 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 annualized rate during that period. REUTERS
Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.
Share with us your feedback on BT's products and services
