US factory orders rose 2.1% in May
Orders to U.S. factories rose in May, helped by a third-straight month of stronger business investment. The gains suggest manufacturing may be picking up after a weak start to the year.
The Commerce Department said Tuesday that factory orders rose 2.1 percent in May. April’s increase was revised higher to 1.3 percent from 1 percent.
Most of the increase in May was due to a big jump in volatile commercial- aircraft demand. Still, businesses also ordered more machinery, computers and household appliances.
A category of orders that’s viewed as a proxy for business investment plans — which excludes the volatile areas of transportation and defense — rose 1.5 percent. That was even stronger than solid gains in the previous two months.
This measure of business investment hadn’t increased for three-straight months since the fall of 2011. The consecutive gains suggest U.S. manufacturing could improve in the second half of the year.
Manufacturing has struggled this year after helping propel the economy in the first three years after the recession ended. U.S. factories have seen less demand for exports because of weaker global growth. And businesses reduced their investment in machinery and equipment in the first quarter.
The May report showed that orders for long-lasting goods, from power- generation equipment to ships and boats, rose 3.7 percent in May. Orders for nondurable goods, including paper, chemicals and oil, rose 0.7 percent.