Financial Schools Reviews

() - After reporting eight consecutive monthly increases in new orders for manufactured goods, the Commerce Department released a report Friday showing that factory orders fell by much more than expected in the month of May.

The report showed that factory orders fell by 1.4 percent in May following a downwardly revised 1.0 percent increase in April. Economists had expected a more modest decrease in orders of about 0.6 percent compared to the 1.2 percent growth originally reported for the previous month.

A notable decrease in orders for non-durable goods contributed to the bigger than expected drop in factory orders, with non-durable goods orders falling by 2.1 percent in May after slipping by 0.6 percent in the previous month.

Orders for durable goods showed a more modest decrease, dipping by 0.6 percent in May following a 2.9 percent increase in April. The drop in durable goods orders in May was revised from the 1.1 percent drop that was reported last week.

The bigger than expected drop in factory orders also reflected a 6.9 percent decrease in orders for transportation equipment in May, which followed a 15.4 percent jump in April. Orders for commercial aircraft and parts showed a notable decrease after rising sharply in the previous month..

Excluding the decrease in orders for transportation equipment, factory orders fell by a more modest 0.6 percent in May compared to a 0.7 percent decrease in April.

The report also showed a notable decrease in shipments of manufactured goods, which fell by 1.3 percent in May after rising by 0.6 percent in April. Shipments of non-durable goods fell by 2.1 percent, while shipments of durable goods edged down by 0.3 percent.

Inventories of manufactured goods also fell following four consecutive monthly increases, with inventories slipping by 0.4 percent in May after rising by 0.6 percent in April. A 2.1 percent drop in inventories of non-durable goods more than offset a 0.9 percent increase in inventories of durable goods.

With the drop in shipments outpacing the drop in inventories, the inventories-to-shipments ratio edged up to 1.25 in May from 1.24 in April.

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