U.S. Factory Orders Slump

New factory orders decreased for a second consecutive month, shrinking by over $5 billion, or 1.2%.

Providing further evidence that the manufacturing recovery is slowing, factory orders slumped in June, the Commerce Department said on August 3.

New factory orders decreased for a second consecutive month, shrinking by over $5 billion, or 1.2%.

Factory orders had only been expected to dip by around 0.5%. The worse-than-expected figure raised concerns about the fragile recovery.

Manufacturing had been a bright spot in the economic rebound, as firms rapidly rebuilt inventories depleted during the depths of the recession.

Goods sales had also been boosted by President Barack Obama's export drive and the stronger dollar.

But in recent months the rate of inventory build up has slowed and the dollar has lost ground to the euro, making exports to Europe more expensive.

"The manufacturing expansion is settling into a slower rate of growth," said Michael Bratus of Moody's Economy.com.

Copyright Agence France-Presse, 2010

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