U.S. factory orders increased a surprising 1.4% in March 2008, the U.S. Commerce Department announced Friday, on rising international demand for U.S. goods. It was the fastest growth for factory orders since December 2007.Economists surveyed by Bloomberg News had expected March 2008 factory orders to increase by 0.3%. Factory orders fell a revised 0.9% in February 2008, slightly better than the previously announced decline of 1.3%.
Also factory orders, excluding the volatile transportation equipment component, increased 2.2% in March 2008.
Economists follow the factory orders statistic because it provides one of the most comprehensive surveys of advance orders for durable goods -- how busy factories are likely to be in the period ahead. Factory orders also are a major value-added component of the U.S. economy.
Orders for durable goods increased 0.1% in March 2008, revised up from the 0.3% decline estimated a week ago. Orders for nondurable goods rose 2.6%, unfilled orders increased 1.1%, shipments climbed 1.1%, and inventories for manufactured goods rose 1.1%.
U.S. economy's saving grace: exports
Economist Peter Dawson told BloggingStocks Friday the economy "is making a concerted effort to complicate economists lives" by recording stronger-than-expected economic data, of late.
"Everyone has the economy set to fall off a cliff, with growth non-existent, and Q1 GDP growth at 0.6% basically was consistent with that point of view," Dawson said. "Then we get today's jobs data which indicated that the economy lost only 20,000 jobs in April [2008] and now a manufacturing stat that's pretty good, and definitely not calamitous. Right now, we have an economy that's inching along."
Dawson said the one saving grace of the U.S. economy -- exports -- continues to perform well. "Part of it is the weak dollar, but part of it also is the competitiveness of U.S. products and services, like commercial jet liner engines and farm equipment and big-ticket construction equipment," Dawson said. "Exports alone can not cause our economy to grow at robust rates, but without those exports we would be in a pronounced recession. Domestic demand is weak, so thank goodness for emerging markets. The rest of the world is developing at the right time, from a U.S. export standpoint."
Still, Dawson expects the U.S. economy "to register at least one quarter of negative GDP growth, most likely in Q2 2008, with another possible in Q3 2008." No one -- investors, traders, executive, typical citizens -- should assume a U.S. economic recovery is near, he said.
"We still have to get past the peak in mortgage defaults and asset write-offs, which won't occur for several months, so the economic outlook will remain clouded at least until the second half of 2008, " Dawson said.
