US factory orders rise in June
NEW orders received by US factories unexpectedly rose in June, government data showed yesterday, advancing for a third straight month and raising cautious hopes of a turnaround for the recession-hit economy.
The Commerce Department said factory orders climbed 0.4 per cent in June after increasing by a revised 1.1 per cent in May, previously reported as a 1.2 per cent rise.
While factory orders data was strong, reports on the services sector and the labour market were weaker.
“The general theme is that the restocking is basically better than expected with factory orders,” said Doug Roberts, chief investment strategist at Channel Capital Research in New jersey. “With factory orders, we’ve been a service-oriented economy so a restocking if there’s no ultimate demand at the other end can be temporary and non-sustainable. So that’s the big concern right now.”
Excluding transportation items, factory orders surged 2.3 per cent in June from May’s 0.9 per cent advance. Shipments of manufactured goods rebounded 1.4 per cent in June, breaking 10 straight months of declines, the department said. Shipments fell 0.8 per cent in May. Inventories of manufactured goods fell 0.8 per cent in June, matching the drop in May.
“The fact is the US economy is improving, but is that a surprise? No, it’s not considering where we were at the beginning of the year. The question is how quickly we can recover and how sustainable is that recovery,” said Joe Trevisani at FX Solutions.