Factory Orders Jump 1.9 Percent Increase May Signal Rise In Production, Job Growth

Orders to U.S. factories jumped 1.9 percent in May, the third straight advance and the biggest in nine months, as the manufacturing sector continued to rebound from last year’s doldrums.

The Commerce Department said Wednesday that orders for both durable and non-durable goods totaled a seasonally adjusted $315.9 billion, up from $310 billion in April.

But April’s initial estimate of a 0.1 percent decline was revised up to a 0.2 percent gain after March’s 1.7 percent advance. The May increase, in line with analysts’ expectations, was the largest since orders increased 2.7 percent last August.

Orders are considered a key gauge of the nation’s manufacturing strength and an increase could mean a pickup in production and job growth.

Until recently, manufacturing had fallen behind in the current economic expansion. But the latest data showed solid gains in industrial production in April and May.

In a separate report, the Labor Department said first-time claims for jobless benefits fell by 4,000 last week - the lowest level in a month. Analysts said the range was consistent with slowing job growth.

The Commerce Department said orders for durable goods - items such as appliances and aircraft expected to last more than three years - shot up 3.4 percent, steepest since a 5.1 percent advance last August. They had fallen 2.5 percent in April.

Meanwhile, a measure of consumer confidence taken weekly by ABC News and Money magazine hit its highest mark since January 1990. The Consumer Comfort Index, based on polling about the economy, personal finances and buying, is hovering above the average it maintained before the 1990-91 recession, ABC said Wednesday.

Orders for non-durable goods, such as chemicals and clothing, managed a 0.1 percent gain following April’s 2.4 percent surge.

The backlog of unfilled orders increased 0.4 percent, the eighth advance in nine months. A growing backlog suggests businesses may have to increase production facilities and manpower to meet demand.

Orders for non-military capital goods excluding aircraft edged up 0.1 percent after April’s 3.3 percent decline. These orders often are a barometer of business plans to expand and modernize and have been a major source of economic strength during the current expansion.