US Factory Orders Point to Improving Economy

Posted July 5th, 2011 at 11:25 am (UTC-5)
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U.S. factories received more orders for goods in May, an indication the country’s manufacturing sector is growing stronger.

The Commerce Department said Tuesday that factory orders rose eight-tenths of a percent in May after falling nine-tenths of a percent the month before.

The report says much of the jump was the result of increased orders for airplanes, automobiles and automobile parts. That suggests manufacturers are starting to recover from oil prices that started peaking earlier this year and from the March 11 earthquake and tsunami in Japan. The natural disaster shut down many Japanese factories and caused a shortage of parts and supplies around the world.

The Commerce Department report also found U.S. companies placed more orders for computers and other equipment. It also boosted an earlier estimate of orders for so-called durable goods – products that are designed to last several years. The department now says durable goods orders in May rose 2.1 percent.

The Commerce Department report is the latest to show signs of strength in the U.S. manufacturing sector.

A report Friday from a business group said a survey of purchasing managers showed the manufacturing sector expanding more quickly in June than in the month before.

Manufacturing has been rebounding more quickly than other parts of the U.S. economy, which is still recovering from the worst recession in decades.