"We're expecting a second-half growth story, which should promote better investment. Growth is pretty stagnant at this point"
- Bricklin Dwyer, an economist at BNP Paribas
New orders for goods produced in American factories rose by slightly more than initially expected in May, largely due to a increase in orders for transportation equipment, data released by the Commerce Department showed on Tuesday. The gains indicates that manufacturing may be stabilizing after a recent slowdown. According to the report, factory orders climbed as much as 2.1% following an upwardly revised 1.3% increase a month earlier. Economists had predicted orders to rise 2.0% compared to the 1.0% growth originally reported for April.
Orders for durable goods surged 3.7% in May after the 3.6% jump in April, whereas orders for non-durable goods rebounded 0.7% following the 0.7% decline in the previous month. Excluding the volatile transportation component, factory orders edged up 0.6%following the 0.2% pickup in the prior month. Additionally, shipments of manufactured goods rose 1.0% in May after two straight months of declines. Gains in residential construction, sales of motor vehicles and increase in domestic energy production are offsetting weakness in U.S. export markets. Stronger business investment in new equipment and increasing consumer demand may contribute to manufacturing expansion in the second half of the year.
© Dukascopy Bank SA