Factory Orders Up in May

Washington, DC, July 5, 2006–Orders for factory goods rose 0.7% in May, the Commerce Department estimated Wednesday.

The rise was larger than expected. Economists had been looking for a gain of 0.1% in factory orders in May.

Factory orders fell a revised 2.0% in April, down from the initial estimate of a 1.8% decline.

The surprising strength in the May report came from non-durable goods orders, which jumped 1.6%.

Orders for durable goods, such as airplanes, computers and washing machines, fell a revised 0.2% in May. This is slightly better than the initial estimate of a 0.3% decline.

Most of the decline in durable goods orders was due to the sharp 2.6% decline in orders for transportation equipment. Excluding transportation equipment, May factory orders climbed 1.2%.

Excluding defense, orders rose 0.8%, the data showed.

Shipments of factory goods jumped 2.2% in May, following a 0.1% drop in April.

Inventories were flat in May, while unfilled orders rose 0.6%, the 12th increase in the last 13 months.

Orders for machinery rose 2.5%, while electronics excluding semiconductors fell 2.5%. Orders for primary metals jumped 4.6%, the biggest increase since last September.

Orders for nondefense capital goods fell 2.3% in May after falling 6.5% in the previous month