U.S. factory orders increase in July despite supply constraints By Reuters

© Reuters. FILE PHOTO: A worker pours hot metal at the Kirsh Foundry in Beaver Dam, Wisconsin, U.S., April 12, 2018. REUTERS/Timothy Aeppel/File Photo

WASHINGTON (Reuters) – New orders for U.S.-made goods rose in July, while business spending on equipment remained strong, signs that manufacturing was holding up despite persistent supply constraints and spending rotating back to services from goods.

The Commerce Department said on Thursday that factory orders increased 0.4% in July after advancing 1.5% in June. Economists polled by Reuters had forecast factory orders gaining 0.3%.

Orders increased 18.0% on a year-on-year basis. Though demand is shifting back to services, appetite for goods remain strong. This, together with an urgency by businesses to restock after inventories were run down in the first half of the year, should underpin manufacturing, which accounts for 11.9% of the economy.

The Institute for Supply Management reported on Wednesday an unexpected pickup in August even as manufacturers complained that labor and raw materials remained scarce.

The rise in factory goods orders in July was led by primary metals and machinery. But supply constraints depressed orders for computers and electronic products as well as those for electrical equipment, appliances and components. Orders for transportation equipment fell 2.1%.

The Commerce Department also reported that orders for non-defense capital goods, excluding aircraft, which are seen as a measure of business spending plans on equipment, edged up 0.1% in July instead of being unchanged as reported last month.

Shipments of these so-called core capital goods, which are used to calculate business equipment spending in the gross domestic product report, rose 0.9%. Core capital goods shipments were previously reported to have advanced 1.0% in July.

Business spending on equipment was robust in the second quarter, notching the fourth straight quarter of double-digit growth. That contributed to hoisting the level of GDP well above its peak in the fourth quarter of 2019.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Source link

Share Market Today