U.S. May factory orders rose 0.4 pct

WASHINGTON, July 2 (Reuters) - Commerce seasonally adjusted data on U.S. factory orders, shipments and unfilled orders. ORDERS-PCT CHANGES: May April March New Orders 0.4 -3.0 2.1 Ex-Transportation 0.8 -2.7 2.1 Ex-Defense 0.8 -2.7 1.7 Manufacturing with unfilled orders -0.3 -2.8 1.5 Durables -0.4 -2.4 1.3 Primary Metals -0.7 2.0 -4.7 General Machinery -0.7 -5.5 4.1 Computers/Electronics 0.7 0.9 2.4 Electrical Equipment Appliances -2.1 -2.4 3.1 Transport Equipment -1.9 -4.7 2.1 NonDefense aircraft -1.2 51.2 -16.9 Defense aircraft -6.3 -21.0 137.8 Ships/boats 20.1 -4.2 -15.2 NonDurables 1.2 -3.7 2.9 Computers and related products -1.3 18.8 -0.8 Motor vehicles/parts -0.5 -3.6 -1.6 NonDefense Cap -0.8 -0.1 3.2 NonDefense Cap ex aircraft -0.4 -2.8 4.8 Defense Cap -15.2 -17.0 16.4 Durables NonDefense 0.4 -1.7 0.6 Unfilled-Durables -0.2 -0.1 0.4 SHIPMENTS-PCT CHANGES: May April March Total 0.4 -2.3 1.6 Durables -0.3 -1.1 0.4 INVENTORIES-PCT CHANGES: May April March Total -0.1 -0.1 -0.2 Computers and related products 0.8 -3.1 0.4 Motor vehicles and parts -0.3 unch -2.3 ORDERS-BLNS OF DLRS: May April March New Orders 320.579 319.428 329.426 Ex-Transportation 271.572 269.460 277.001 Ex-Defense 311.479 309.109 317.632 Manufacturing with unfilled orders 117.170 117.532 120.870 Durables 168.252 168.876 173.066 Primary Metals 10.502 10.571 10.364 General Machinery 21.328 21.488 22.739 Computers/Electronics 27.240 27.053 26.802 Electrical Equipment Appliances 8.449 8.631 8.841 Transport Equipment 49.007 49.968 52.410 NonDefense aircraft 4.455 4.507 2.980 Defense aircraft 4.311 4.601 5.823 Ships/boats 2.011 1.675 1.748 NonDurables 152.327 150.552 156.360 Computers and related products 7.502 7.599 6.397 Motor vehicles/parts 35.030 35.198 36.511 NonDefense Cap 55.341 55.793 55.842 NonDefense Cap ex aircraft 53.790 54.027 55.557 Defense Cap 7.639 9.013 10.863 Durables NonDefense 159.152 158.557 161.272 Unfilled-Durables 476.572 477.402 478.035 SHIPMENTS-BLNS DLRS: May April March Total 321.409 320.061 327.745 Durables 169.082 169.509 171.385 INVENTORIES-BLNS DLRS: May April March Total 431.723 432.257 432.500 Computers and related products 6.727 6.674 6.888 Motor vehicles and parts 20.620 20.685 20.678 INVENTORIES/SHIPMENTS RATIO: May April 1.34 1.35 PREVIOUSLY REPORTED PERCENT CHANGES: . May April March Factory Orders N/A -2.9 2.1 Durable Goods -0.3 -2.4 1.3 N/A-not available FORECAST: Reuters survey of economists forecast: U.S. May factory orders unchanged NOTES: The inventories/shipments ratio is a measure of the number of months it takes to deplete inventories at the current pace of shipments. General machinery includes groups such as industrial, farm, construction, mining and metalworking. Initial orders for May durable goods were issued on June 25.

sorry, but for those who'd pretend to have never seen one, it's just an atypically classic historical market economy recovery ... ;)

From Reuters:

May Factory Orders Rise Unexpectedly
July 02, 2003 11:38:00 AM ET

WASHINGTON (Reuters) - Demand for U.S. manufactured goods rose unexpectedly in May, helped by a solid increase in orders of non-durable goods, a government report showed on Wednesday.

In another good sign for the economy, a separate report showed that applications for U.S. mortgages surged last week as consumers rushed to get home loans before rates increased.

Factory orders climbed 0.4 percent in May, the Commerce Department said, beating analyst expectations that orders would be unchanged. The increase followed a revised drop of 3.0 percent in April.

``It really looks like this report along with the other reports we've seen from the manufacturing sector... seem to point to an incipient turnaround in the manufacturing sector,'' said Mark Vitner, economist at Wachovia Securities.

``We're probably at the turning point.''

Orders for non-durable goods -- items not intended to last over three years -- rose 1.2 percent after plunging 3.7 percent in April. Some economists had looked for a rise in demand for non-durable goods due to a rebound in energy prices.

Orders of durable goods -- items intended to last three years or more -- fell 0.4 percent, pulled down by falls in several sectors. Stripping out transportation, orders rose 0.8 percent, and without defense, orders were also up 0.8 percent.

Machinery orders dropped 0.7 percent while demand for electrical equipment and appliances sank 2.1 percent. A bright spot was a 0.7 percent increase in orders of computers and electronic products.

The inventory-to-shipments ratio, which measures the amount of time it would take to use up stocks at the current pace of shipments, fell to 1.34 months from 1.35 months in April.

On Tuesday, the Institute for Supply Management said its national factory gauge rose to 49.8 in June from 49.4 in May, failing to break above the 50 level that divides growth from contraction. The index showed a fourth straight month of shrinking output and was below forecasts of a rise to 51.0.

But digging into the data, analysts said the ISM index's components suggested the manufacturing sector is gearing up for a more robust rebound.

In mid-June, the Federal Reserve Bank of New York said its Empire State Manufacturing Survey climbed to 26.8, the highest level in its two-year history, another report offering hope for the factories.

HOUSING STILL HOT

There was also good news on Wednesday for the housing sector. Applications for U.S. mortgages rose 5.2 percent in the June 27 week, a trade group said, as rates edged higher and consumers rushed to borrow before rates rose higher still.

``The bottom for rates has passed,'' said Doug Duncan, chief economist at the Mortgage Bankers Association of America.

The association forecasts that banks will make a record $3.3 trillion of mortgage loans this year, well above the record $2.5 trillion loans made in 2002.

Analysts will be looking to Thursday's reports on the jobs market for further clues about the economy's health.

Forecasters are looking for payroll employment in June to be unchanged while jobless claims in the latest week are seen at 410,000, up from 404,000 the previous week.

The resident Bush-Limbaugh-Bull Bot seems to have made his presence felt again on this thread. I wonder if some people have a clue that a .4% rebound after a 3% drop isint that impressive, and that non durable goods is of less value than durable goods.

As I satated before, I expect the bullish bias to continue as long as the artifically low bond yeilds persist, or get exhusted. The 10 year getting in the 4 to 4.% range, or the bonds remaining in their current yeild range for another 3-6 months will singal game over for the re-fi boom, and the dominos will fall.

When the re-fi boom runs its course, it will affects financial agencies and GSEs(Think FNM/FRE and Countrywide credit) first, then homebuilders, then other construction companies, the consumers because they will not have their "fix" of cash they so desperately need. The economy has been running on re-fis alone, and re-fis alone will not fix the economy.

If the Bush admin is attempting to blow out shorts now, they are doing it all wrong, at least 9 months early, and if the Bush admin is trying to keep rates artifically low, they risk exhusting the re-fi boom by late fall of this year. When the re-fi boom is exhusted, its game over, since there is no pent up demand in real estate or autos.

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