Orders for U.S. Manufactured Goods Increased in May

Factory orders increased 0.7 percent in May from April, the Commerce Department said Tuesday. The increase is a welcome sign after two months of declining factory orders.

Still, factory orders are down from the start of the year. And more recent data shows manufacturing activity shrank in June for the first time in three years, adding to worries that weaker global growth is weighing on the economy.

“The demand for manufactured goods is recovering moderately and irregularly, but that recovery has been relatively weak relative to the magnitude of the previous declines,” said Steven Wood, chief economist at Insight Economics.

Core capital goods, which include machinery and computers, rose 2.1 percent, which is better than the 1.6 percent estimated in a preliminary report a week ago.

Overall factory orders increased to $469 billion. That’s 43.5 percent higher than the recession low reached in March 2009. But orders have fallen 2.5 percent over the last five months from their postrecession high in December.

Manufacturing has lost some vigor this year as job growth has slowed and consumers and businesses are less confident in the economy.Europe’s debt crisis has reduced demand for American exports.

Orders for long-lasting durable goods, everything from airplanes to refrigerators, rose 1.3 percent in May. Orders for nondurable goods, which include food, paper, chemicals and energy products, edged up 0.2 percent. The increase may have been held back by falling oil and gas prices.

Still, orders are likely to decline in June, based on a report from the Institute of Supply Management. The trade group of purchasing managers on Monday said manufacturing contracted in June for the first time since July 2009 — one month after the recession ended