U.S. factory orders drop sequentially in April

Factory orders in the U.S. dropped in the month of April. Orders fell 0.8 percent sequentially, consistent with expectations. Preliminary data on durable goods orders for April were already available ahead of today’s report. The data indicated a 1.7 percent fall in orders driven mainly by volatile non-defence aircraft category, noted Barclays in a research report.

The additional information received today was on orders and shipments for non-durable goods, which were greatly flat, as was anticipated. In the meantime, there were minor upward revisions to the preliminary durable goods order data, although the overall contours of the report continued to be the same. Overall, the softness in factory orders were mainly due to a volatility category, and there is a little negative signal from this report.

The inventories side of the report was slightly strong, in particular for nondurable goods, which stimulated the inventory accumulation in the second quarter, stated Barclays.

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