WASHINGTON -- Orders to US factories for manufactured goods rebounded in May after a big decline the previous month as strengthened demand for petroleum and chemicals offset weakness in commercial aircraft and autos.
The Commerce Department reported yesterday that new orders rose by 0.7 percent in May following a 2 percent plunge in April. The slight increase left orders at a seasonally adjusted $399.9 billion in May. The gain was significantly better than the 0.1 percent increase analysts had been expecting.
The strength in May stemmed from a 1.6 percent rise in demand for nondurable products. It offset a 0.2 percent drop in demand for durable goods, which are big-ticket items expected to last three years or more.
Analysts believe that manufacturing, a sector of the economy hardest hit by the 2001 recession, probably will slow in coming months along with the rest of the economy.
Overall economic growth raced ahead at a breakneck pace of 5.6 percent in the first three months of this year. But gasoline prices, rising interest rates, and a cooling housing market are all weighing on the economy. Analysts believe growth slowed to about 2.5 percent to 3 percent in the April-June quarter and will remain at that pace in the second half of the year .