FILE PHOTO: Line workers spot weld parts of the frame on the flex line at Nissan Motor’s automobile manufacturing plant in Smyrna, Tennessee, US, Aug 23, 2018.
The Commerce Department said on Friday (Oct 2) that factory orders rose 0.7 per cent after accelerating 6.5 per cent in July. Economists polled by Reuters had forecast factory orders would increase 1 per cent in August.
Manufacturing, which accounts for 11.3 per cent of US economic activity, is recovering from its pandemic lows as businesses replenish inventories. The pace of expansion, however, is slowing as the coronavirus crisis lingers and the boost from fiscal stimulus ebbs.
The Institute for Supply Management reported on Thursday that its measure of national factory activity fell in September as new orders retreated from more than a sixteen-and-a-half-year high.
Unfilled orders at factories dropped 0.6 per cent in August after falling 0.7 per cent in July. Inventories at factories were unchanged, while shipments of manufactured goods rose 0.3 per cent.
The government also reported that orders for non-defence capital goods excluding aircraft, which are seen as a measure of business spending plans on equipment, rose 1.9 per cent in August instead of increasing 1.8 per cent as reported last month.
Shipments of core capital goods, which are used to calculate business equipment spending in the GDP report, increased 1.5 per cent as previously reported.
Business investment tumbled at a record 26 per cent annualised rate in the second quarter, with spending on equipment collapsing at an all-time pace of 35.9 per cent. Investment in equipment has contracted for five straight quarters.
