US factory orders rise more than expected in May
New orders for US-manufactured goods increased more than expected in May, bucking a slew of recent data showing a softening in the economy and underscoring that demand for products remains strong even as the Federal Reserve aggressively tightens financial conditions.
The Commerce Department said on Tuesday that factory orders rose 1.6% in May after advancing 0.7% in April. Economists polled by Reuters had forecast factory orders would rise 0.5%.
Other indicators have shown less resilience. A survey on Friday showed the Institute for Supply Management’s national factory activity index contracted for a second straight month, though an “overwhelming majority” of companies indicated they were hiring.
That followed moderate consumer spending growth in May along with weak housing starts, building permits and factory production.
Manufacturing accounts for 12% of the U.S. economy and is being held up by strong demand for goods even as overall spending rotates more toward the services sector. The U.S central bank is seeking to cool demand across the economy as it tries to tamp down high inflation.