U.S. factory orders fell 0.6% in April

Companies placed fewer orders to U.S. factories for the second straight month, and a key measure that tracks business investment plans fell, adding to evidence that the economy is weakening. The Commerce Department reports this morning that orders for factory goods fell 0.6% in April from March. Demand for so-called core capital goods, such as heavy machinery and computers, dropped 2.1% in April. That followed a 2.3% decline in March. Core capital goods are a good proxy for business investment plans. The declines suggest companies may be worried about a weaker U.S. job market, which could crimp consumer spending. They may also fear the worsening European debt crisis, and slower growth in China could reduce demand for U.S. exports. Yet even with the declines, factory orders are well above their recession lows. Orders in April totaled $465.98 billion, up 38.7% from the recession low reached in March 2009. Orders are still 3.1% below the peak reached in December 2007, the month the recession began.