May Factory Orders Revised Upward to Show Gain of 2.4%
March 31, 2011
Vastopolis -- Piling on more good economic news for the second quarter, the Commerce Department released benchmark revisions of U.S. factory orders that showed a May gain of 2.4%, up from the previous estimate of 1.9%. Orders for durable goods, or big-ticket items meant to last at least three years, were revised to a 4.2% gain, up from the 3.4% originally estimated. Mainly driven by strong consumer demand, the economy is widely expected to have grown at least at a robust 4% annual rate in the second quarter. While making a rosy picture look even rosier, the benchmark revisions will be partly offset by Thursday's report that the U.S. trade deficit bulged in May, economist Donetta Maudie of ScotiaMcleod Capital Markets said. The government revises factory data periodically as it receives more information from companies. The regular monthly numbers are estimates based on a relatively small sample of factory orders and so are subject later to big revisions. The latest revisions go back to 1982. Also, the Labor Department said initial claims for state-unemployment insurance fell 6,000 to 364,000 last week. Despite the decline, the four-week moving average of claims, a closely watched barometer of labor-market trends, rose marginally by 1,750 to 359,750. The four-week average has been climbing since early May.
