Factory orders rise in March thanks to strong demand in defense equipment
Reuters reports that on Wednesday, Commerce Department released data indicating that new orders for factory goods rose 1.1% in March after falling a revised 1.9% in February. The March increase in new orders was higher than the 0.6 percent rise economists had anticipated. However, orders for so-called core capital goods, which includes non-defense capital goods but excludes aircraft, increased 0.1%.
The AP (5/4, Crutsinger) states the rise in factory orders is a reflection of “stronger demand in the volatile category of defense equipment,” as the increase in core capital goods, “a proxy for business investment posted a tiny 0.1 percent rise in March after a 2.7 percent decline in February.” The AP adds that durable-goods orders rose 0.8% and nondurable-goods orders increased 1.5%.
Bloomberg Analysis: Stagnating US Productivity May Be Connected To Drop In Energy, Manufacturing Jobs. A Bloomberg News analysis states that “factory and oil field payrolls might hold a clue” about the stagnating US productivity.
The Federal Reserve Bank of Kansas City “suggested in April research” that jobs in energy and manufacturing “tend to have higher productivity, and they’re making up a smaller share of the hours worked in the economy as oil prices slump,” which “could be a driver behind the weaker gains.”