- Quincy Krosby, Prudential Financial
New orders for US-made goods declined more than estimated for the second consecutive month in May, a worrisome sign for the manufacturing industry. The US Commerce Department reported on Wednesday that the country's factory orders dropped 0.8% month-over-month in May, following a downwardly revised 0.3% fall registered in April. Meanwhile, analysts anticipated new orders to show a smaller decline of 0.5%. On a yearly basis, factory orders were up 4.8%, suggesting that US manufacturing activity continued to expand at a moderate pace. Excluding transport, orders plunged 0.3% in the reported month after being flat in April. Moreover, the report showed that orders for non-defence aircrafts dipped 11.6%, following a 12.2% decline in the previous month. Overall, factory data marked slow growth amongst most industry sectors without any signs of a sustained expansion. Mixed US macroeconomic reports called to question the US economy's ability to achieve Trump's ambitious targets. However, despite sluggish inflation and economic growth the Fed left the third interest rate hike on the table.
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