US factory orders increased in March, first rise in eight months
US factory orders increased in March after seven consecutive months of declines, according to the US Commerce Department.
The rebound was boosted by demand for computers and transportation equipment.
New factory orders for manufactured goods increased by 2.1 percent in March to $476.5 billion. This was in line with what analysts expected after a downward revised 0.1 percent drop in February.
Orders for long-lasting durable goods rose for the second time in three months, with computer orders up 27 percent and transportation equipment orders up 13.5 percent.
Excluding transportation, which can be volatile month-over-month, orders were flat in March after a 0.1 percent rise in February – the first rise since June.
Factory shipments climbed 0.5 percent in March, the second straight monthly rise.
Orders for non-defense capital goods excluding aircraft, considered a proxy for business investment plans, rose by 0.1 percent in March – the first increase since last August. Capital goods, such as machinery, buildings, computers, trucks, etc. are things that produce goods or provide services.
Since last summer the US manufacturing sector has struggled because of a strong dollar and low crude oil prices.
The value of the dollar has soared since June. According to Reuters, it has appreciated 12 percent against the currencies of the country’s main trading partners.
The results indicate that the US economy gained some momentum. However, growth is not at a rate that the Fed wants to see before increasing rates, which most analysts expected to occur earlier this year.
Last week a government report revealed that the US economy only expanded at a rate of 0.2 percent annual growth in the first quarter.
Economists blame harsh winter conditions for lackluster growth in the first quarter and expect to see an improvement in second quarter results.