American industry registers an uptick in incoming orders.
In April, the US industry experienced a surge in orders, just what the experts didn't expect. The Commerce Department reported a 0.7% growth from the previous month, marking the third consecutive month of increases. Originally, economists predicted an increase of just 0.6%, while March's orders hiked by the same 0.7%. The adjusted figures showed that the increase in March was actually 1.6% initially.
However, despite these recent order boosts, industrial indicators make it apparent that the industry isn't doing well. The ISM's purchasing manager index showed an accelerated decline in May, indicating a struggling sector.
With the economy barely crawling at the start of the year, it hadn't grown in nearly two years before finally hitting a 1.6% GDP growth rate in the first quarter of 2023 compared to the previous year. Despite things looking up at the end of 2023 with a 3.4% boost, the reality sets in that the Fed is trying to curb strong inflation with their tight monetary policy. As a result, the economy isn't as vibrant as one would expect. The Fed maintains the monetary policy rate at 5.25% - 5.50%. Most experts believe that interest rates won't turn around until the fall.
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The increase in orders in April led to a positive consequence for the US industry, marksing the third month in a row of growth. However, this positive trend hasn't entirely translated into improved industrial performance, as evidenced by the ISM's purchasing manager index showing a decline in May.
