July 3, 2019 / 2:09 PM / 15 days ago

U.S. factory orders fall for second straight month

FILE PHOTO: Workers on the assembly line replace the back covers of 32-inch television sets at Element Electronics in Winnsboro, South Carolina, U.S. on May 29, 2014. REUTERS/Chris Keane/File Photo

WASHINGTON (Reuters) - New orders for U.S.-made goods fell for a second straight month May while shipments barely rose, pointing to continued weakness in manufacturing.

Factory goods orders decreased 0.7%, weighed down by weak demand for transportation equipment, the Commerce Department said on Wednesday. Data for April was revised sharply down to show factory orders falling 1.2% instead of slipping 0.8% as previously reported.

Economists polled by Reuters had forecast factory orders falling 0.5% in May. Factory orders rose 0.9% compared to May 2018. Manufacturing, which accounts for about 12% of the economy, is struggling amid an inventory bloat, trade tensions between the United States and China, and a reduction in the production of Boeing’s (BA.N) 737 MAX aircraft.

The weak factory orders data was flagged by a report last month showing the second straight monthly drop in demand for long-lasting manufactured goods in April, as well as a drop in manufacturing production.

A survey on Monday showed a measure of national factory activity dropped to a near three-year low in June, with manufacturers expressing concern over the U.S.-China trade tensions.

Transportation equipment orders dropped 4.6% in May after tumbling 7.6% in April. Orders for civilian aircraft and parts declined 28.2%. There were increases in order for computers and electronic products and machinery.

The Commerce Department also said May orders for non-defense capital goods excluding aircraft, which are seen as a measure of business spending plans on equipment, rose 0.5% instead of the 0.4% gain reported last month.

Shipments of core capital goods, which are used to calculate business equipment spending in the gross domestic product report, increased 0.6% in May instead of 0.7% as previously reported.

Overall shipments of manufactured goods edged up 0.1% in May after dropping 0.6% in April.

Reporting by Lucia Mutikani; Editing by Andrea Ricci Lucia.Mutikani@thomsonreuters.com; 1 202 898 8315; Reuters Messaging: lucia.mutikani.thomsonreuters.com@reuters.net

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