Factory orders fall for third time in four months
Another bad sign for the economy. Industrial output, which had been surging in the first quarter, appears to be leveling off and even falling in the second quarter.
New orders for factory goods fell in April for the third time in four months as demand slipped for everything from cars and machinery to computers, the latest worrisome sign for the economic recovery.
Outside transportation, orders dropped 1.1 percent, with machinery down 2.9 percent and orders for computers and electronics off by 0.8 percent.
The Commerce Department said on Monday orders for manufactured goods dropped 0.6 percent during the month. The government also revised its estimate for new orders in March to show a steeper decline.
Economists had forecast orders rising 0.2 percent in April.
The report showed broad weakness in a sector that has carried the economic recovery, adding to a growing body of soft economic data.
The Labor Department on Friday reported that job creation slowed in May for the fourth straight month. Also that day, the Institute for Supply Management said the pace of growth in manufacturing slowed modestly in May, although the ISM's own gauge of new orders rose to its highest in over a year.
The Commerce Department report showed new orders for motor vehicles and parts fell 0.5 percent in April.
An increase in new orders for civilian aircraft buoyed the overall transportation sector.
Manufacturing does not drive the economy as it once did, but it is still a bellweather of how the overall economic picture looks. The fact that the fall off in orders was a surprise matters more than the actual numbers, which showed a modest decline. Confidence in the economy -- never that robust to begin with -- is falling.
The savior at this point must be the consumer. Faith in the future will keep consumer spending high which will eventually pull manufacturing out of the doldrums. But with unemployment not getting any better - or worsening - and wages stagnant, it's hard to see how consumers won't begin to pull back and rein in their purchases - especially of big ticket items like autos and appliances.