New orders for U.S.-made goods fell slightly during February and shipments rose after four straight monthly declines, but the manufacturing sector is slowing amid rising inventories.
Figures released Monday by the U.S. Commerce Department Monday showed factory goods orders dropped 0.5%, pulled down by weak orders for machinery, transportation equipment and computers and electronic products. Data for January was revised down to show factory orders unchanged instead of edging up 0.1% as previously reported.
Economists had been looking for factory orders to falling 0.6% in February. Factory orders rose 2.4% compared to February 2018. The release of the report was delayed by a 35-day partial shutdown of the federal government that ended on Jan. 25.
Manufacturing, which accounts for about 12% of the economy, is losing momentum as the stimulus from last year’s $1.5-trillion tax cut package fades. Activity is also being hampered by a trade war between the United States and China as well as by last year’s surge in the dollar and softening global economic growth, which are hurting exports.
While a survey last week showed a measure of national manufacturing rebounded from a more than two-year low in March, factory payrolls fell for the first since July 2017. Job losses were mostly concentrated in the automotive sector, where slowing sales that have led to an inventory bloat.
