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US Factory Orders Decline Unexpectedly in April

US factory orders declined in April for the eighth time in nine months, adding to existing evidence that the manufacturing economy is facing strong headwinds in 2015.

Factory orders declined 0.4 percent in April, following an upwardly revised gain of 2.2 percent in March, the Commerce Department reported on Monday. A median estimate of economists forecast a flat reading for April.

Excluding transportation equipment, new orders were flat in April.

Factory orders have increased just once in the last eight months. The halving of oil prices and broad slowdown in manufacturing activity weighed on factory orders in the first quarter. Last week the Commerce Department said gross domestic product expanded just 0.2 percent annually in the first quarter, well below forecasts.

On Monday the Institute for Supply Management said US manufacturing activity advanced at a stronger rate in May, as new orders, production and employment all rose. ISM’s manufacturing PMI increased to 52.8 in May from 51.5 in April, as 14 of 18 manufacturing industries reported growth.

It may be a while still before the US economy full regains its footing after contracting in the first quarter. Gross domestic product dwindled 0.7 percent annually in the January to March period, revised estimates showed last week. With the contraction, US GDP growth is likely to remain below 3 percent in 2015.

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