US Factory Orders Fall 1.3% in May, Less Than Expected
US factory orders fell 1.3% in May, slightly better than the 1.8% decline expected, offering a mixed signal on manufacturing demand.
U.S. factory orders fell 1.3% in May, a smaller decline than the 1.8% drop economists had forecast, according to data released Friday by the Commerce Department.
The headline decline was largely driven by a sharp drop in transportation equipment orders, which fell 5.0% as aircraft and defense bookings swung sharply. Excluding transportation, orders rose 0.3%, while core capital goods orders — a proxy for business investment — were revised higher for April. The mixed data suggest that while manufacturing demand is cooling, it is not collapsing. For currency traders, the slightly better-than-expected print may temper expectations of aggressive Federal Reserve rate cuts, supporting the dollar in the near term. NowPrice real-time FX quotes show the dollar index holding steady following the release.
Looking ahead, markets will focus on the June nonfarm payrolls report due next week for further clues on the labor market's trajectory. A strong jobs number could reinforce the Fed's cautious stance, while a weak print might revive bets on earlier easing. Factory orders data for June is scheduled for release in early August.