American factory orders increase 0.7% in May

Companies placed more orders with U.S. factories in May than in April, demanding more computers, machinery and other equipment that signal investment plans. The increase is a welcome sign after two months of declining factory orders. Still, manufacturing has slowed from the start of the year, adding to worries that weaker global growth could weigh on the U.S. economy. The Commerce Department reports this morning that factory orders increased 0.7% in May. And core capital goods, such as machinery and computers, rose 2.1%. That’s better than the 1.6% estimated in a preliminary report a week ago and is a good measure of companies’ plans to invest. The increase left orders for durable goods at $469 billion, up 43.5% from their recession low, reached in March 2009. But orders are down 2.5% from their post-recession high, hit in December. Manufacturing has lost some vigor this year. U.S. consumers and businesses are less confident in the economy and are spending less. Europe’s debt crisis has reduced demand for U.S. exports. And manufacturing has slowed in big countries like China, which rely on U.S. factories for equipment, machinery and vehicles. The Associated Press has additional figures in the full story here.