US factory orders rise a modest 0.3% in May

US factory orders rose a modest 0.3% in April after a much larger gain in the previous month, perhaps a sign of some moderation in manufacturing.

Economists polled by the Wall Street Journal had forecast growth of 0.6%.

American factories have been busy over the past year due to strong demand for machinery, electronics, automobiles and other high-priced items that are designed to last at least three years.

The main obstacles were the lack of supplies and manpower. They contribute to the highest US inflation in 40 years.

But with the Federal Reserve raising interest rates to tame inflation, the economy is likely to slow. Economists are watching the manufacturing sector closely for signs of a slowdown.

Factory orders were very mixed in 2022 after a series of generally strong gains over the previous two years.

Durable goods orders rose a revised 0.5% in April from a previously reported 0.4% increase.

Orders for consumer goods such as clothing or groceries rose 0.2% in the month.

Another measure of factory conditions, seen as an indicator of business investment, rose a revised 0.4%, said the governmenta tad higher than originally reported.

These so-called core orders eliminate the ascending and descending transport sector and government spending on military equipment. They are viewed by investors as a signal of future business prospects.

“When corporate confidence falters, companies would be more cautious about their investment decisions,” said Regions Financial chief economist Richard Moody.

In recent trades, the Dow Jones Industrial Average DJIA,
and S&P 500 SPX,
declined. US factory orders rise a modest 0.3% in May

Brian Lowry

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