U.S. Factory Orders Fall for First Time in Four Months
U.S factory orders last month fell short of analysts’ expectations, marking the first time in four months demand for manufacturers’ goods declined. New orders for manufactured goods decreased by $0.4 billion, or 0.1 percent, to $446.0 billion, the Commerce Department reported today. This followed a 3.3 percent January increase. Excluding transportation, new orders increased 0.1 percent; shipments increased by $1.4 billion or 0.3 percent to $448.3 billion, marking the sixth consecutive gain.New orders for durable goods also fell, down for the fourth time in five months, dropping by $1.3 billion to 0.6 percent to $200.8 billion.
U.S. Manufacturers New Orders s.a. (MoM): March 2007 to Present
While the data certainly outlines the fragility of the U.S. recovery, the soft data suggests that the U.S. economy may be showing signs of slowing, not necessarily outright weakness. Companies could be reducing spending on new equipment until signs of a broad-based recovery take root, with the labor market and housing market lagging the recovery. Business activity continues to expand in the U.S., it should be noted. According to the Chicago Institute for Supply Management-Chicago reading, business continued to expand, with a reading of 70.6 in March, but down from 71.2 in February. A reading over 50.0 signals expansion. The decline falls in line with the drop in orders for capital goods less aircraft and military equipment, which fell by 0.7 percent after contracting by 5.9 percent in January. Orders for capital goods less aircraft and military equipment have historically been a leading indicator for future business investment.
Written by Christopher Vecchio, DailyFX Research.
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