New orders at US factories rose more than expected in May and private-sector job creation surged last month, according to reports on Wednesday that showed signs of strength in the economy.
According to another set of reports, chain store sales slipped or were soft in recent weeks after heavy rain caused flooding in the Northeast region and slowed shoppers.
In a sign of strong manufacturing and business spending, factory orders climbed 0.7 percent in May despite a drop in orders for transportation equipment, Commerce Department data showed. Wall Street analysts polled by Reuters were expecting a 0.1 percent rise in the often volatile orders number after a revised April fall of 2.0 percent.
Excluding transportation, orders advanced 1.2 percent in May. Factory orders were also higher when defence equipment was stripped out, growing 0.8 percent in the month. May's gain in factory orders was the strongest since March as primary metals, machinery and electrical equipment orders rose.
Orders for durable goods, expensive items meant to last three years or more, slipped 0.2 percent, an improvement from the originally reported 0.3 percent decline. This followed a 4.7 percent tumble in April.
Primary metals orders rose 4.6 percent, machinery orders climbed 2.5 percent, and electrical equipment orders gained 0.9 percent. However, transportation orders fell 2.6 percent due to a 17.9 percent tumble in non-defence aircraft and parts.
Non-defence orders excluding aircraft, seen by economists as a guide to the health of US business spending, rose 0.5 percent after a slide of 2.1 percent the month before.
In a sign of manufacturing resilience ahead, unfilled orders rose 0.6 percent - the fourth straight gain in this measure - to a record high $611.3 billion. At the same time, inventories fell, lowering the inventories-to-shipments ratio to 1.15 months' worth from 1.17 in April.
368,000 JOBS CREATED Another report showed US private sector employers created an estimated 368,000 jobs in June, compared with 122,000 jobs in the previous month. The monthly ADP National Employment Report is based on payroll data and measures the change in total non-farm employment each month.
According to the latest Reuters poll of economists, the US Labour Department on Friday is expected to report that 155,000 non-farm jobs were created last month, up from 75,000 in May. But after the robust ADP report, many analysts may rethink their estimates.
CHAIN SALES SLIP Meanwhile, US chain store sales slipped in the latest week as slowing customer traffic and flooding in the US Northeast crimped activity, according to one report.
Sales fell 0.7 percent in the week ended July 1 after declining 0.4 percent in the previous week, according to the report produced by the International Council of Shopping Centres and UBS Securities LLC. Redbook Research's chain store report showed sales rose but were weak in the fifth and final week of June.
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