Orders to US factories for high-value products recovered last month from a disastrous April and March when the US economy slowly began to reopen
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WASHINGTON – Orders to US factories for high-priced products recovered last month from a disastrous April and March as the US economy slowly reopened.
The Commerce Department said orders for manufactured goods meant to last at least three years soared 15.8% in May after falling 18.1% in April and 16.7% in March. Economists had expected a rebound, but the May increase was stronger than expected.
A category that tracks business investment (non-defensive capital goods orders excluding aircraft) rose 2.3% after falling 6.5% in April.
Excluding the transportation sector, which rebounds from month to month, durable goods orders increased by a more modest 4%. New auto and auto parts orders rose 27.5% last month after falling 53.7% in April and 19.5% in March.
Blockades, travel restrictions, and social distancing measures aimed at containing COVID-19 brought economic activity to almost a standstill in the United States in March and April. As states gradually reopened, some measures of economic activity registered strong increases, although the economy remains much weaker than a year ago.
“We had extreme lows,” said Matt Orton, portfolio specialist at investment firm Carillon Tower Advisers. “It is natural that we recover from that and have extreme levels.”
Economists Oren Klachkin and Gregory Daco of Oxford Economics remain concerned about an increase in cases in the south and west. “Deteriorating health conditions in many US states, even where manufacturing activity is concentrated, is a risk to incipient recovery,” they wrote in a research report.
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