US factory orders shoot up, but economic optimism struggles

US factory orders have shot up in May, growing by 2.1 per cent after growth of 1.3 per cent last month (revised from 1.0 per cent). Economists had expected growth of just 2.0 per cent.

New orders for manufactured goods in May, up three of the last four months, increased $9.9 billion or 2.1 percent to $485.0 billion, the U.S. Census Bureau reported today. This followed a 1.3 percent April increase. Excluding transportation, new orders increased 0.6 percent.

Shipments, up following two consecutive monthly decreases, increased $4.6 billion or 1.0 percent to $483.6 billion. This followed a 0.7 percent April decrease.

Unfilled orders, up three of the last four months, increased $8.2 billion or 0.8 per cent to $1,004.8 billion. This followed a 0.3 percent April increase. The unfilled orders-to-shipments ratio was 6.21, down from 6.28 in April.

Inventories, up six consecutive months, increased $0.3 billion to $627.8 billion. This was at the highest level since the series was first published on a NAICS basis in 1992, and followed a 0.1 percent April increase. The inventories-to-shipments ratio was 1.30, down from 1.31 in April.

However, economic optimism for July dropped from 49 to 47.1, despite expectations of a rise to 49.3. All three components (six-month economic outlook, personal financial outlook and confidence in Federal economic policies) declined.

Earlier the ISM New York Index fell from 54.4 to 47 for June.