New orders for American-made goods increased less than anticipated in May, as the effect of a surge in civilian aircraft orders was partially offset by a decline in demand in other sectors amid rising interest rates.
The U.S. Department of Commerce reported on Wednesday that factory orders rose by 0.3 percent, following a similar increase in April. Economists surveyed by Reuters had forecasted a rebound of 0.8 percent. Orders increased by 0.1 percent year-on-year in May.
The manufacturing sector, which accounts for 11.1 percent of the U.S. economy, is experiencing a downturn due to rising interest rates and a shift in spending from goods to services, which are often purchased on credit. Additionally, companies are cautiously managing their inventories in anticipation of weaker demand.
The Institute for Supply Management indicated that the purchasing managers' index for the manufacturing sector declined in June, marking the eighth consecutive month that the index reading has remained below 50, suggesting a contraction in manufacturing activity. This is the longest period since the Great Depression.
Transportation equipment orders rose by 3.8 percent in May, after a 4.8 percent increase in April. Civilian aircraft orders surged by 32.8 percent, but vehicle orders fell by 0.6 percent.
Orders for machinery increased by 1.2 percent, while orders for computers and electronic products rose by 0.3 percent.
