Newspaper article THE JOURNAL RECORD

Factory Orders Up 2.9% in May

Newspaper article THE JOURNAL RECORD

Factory Orders Up 2.9% in May

Article excerpt

WASHINGTON (AP) _ Orders for manufactured goods grew 2.9 percent in May, the second consecutive advance and the largest in more than a year, the government said Tuesday.

Analysts said the report further confirmed their belief the manufacturing economy was emerging from its recession.

Economist Marilyn Schaja of Donaldson, Lufkin & Jenrette Securities in New York, said it "fits with other recently reported statistics supporting the impression that the manufacturing sector is improving."

But Thomas Runiewicz, an economist with the WEFA Group of Bala Cynwyd, Pa., said the economic forecasting service "is expecting things to be fairly slow during the summer before accelerating a little bit in the fall."

The Commerce Department said orders for both durable and non-durable goods totaled a seasonally adjusted $238.0 billion in May, up from $231.2 billion a month earlier and the largest increase since a 4.4 percent gain in March 1990.

Analysts had expected an advance of only about 2 percent in May.

Even the April increase was larger than first thought. The department revised that gain to 2.1 percent from the 1.8 percent in its initial estimate.

But after declining steadily from November through March, factory orders remained 6.7 percent below their October peak of $255.0 billion.

It was the second report in two days suggesting the industrial sector was emerging from the recession. The National Association of Purchasing Management said Tuesday its widely followed index of business activity rose to 50.9 percent in June from 45.4 percent in May. An index above 50 percent means the manufacturing economy is expanding.

And since factory orders are a key barometer of manufacturing industry plans, the increase could mean more production and employment in the months ahead.

Inventories declined, down 0. …

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