Factory Orders beast expectations with a 0.7% rise (against expectations of a 0.5% rise) but this marks the 2nd month in a row after the February spike bounce back that growth has slowed and in fact shows the post-weather-slump recovery is anything but being sustained. Ex-defense, new orders for April actually fell 0.1% (after rising 1.1% in March)... simply put, the entire beat was driven by defense (does that sound sustainable? or like organic growth?) Non-defense factory orders were the weakest since January (in the middle of the catastrophic weather). Also, in the aftermath of yesterday's ISM fiasco, we wonder if the Dept of Commerce is sure it used the right seasonal adjustment: unadjusted factory orders tumbled 4.3% in April.
[3]
Where did the "beat" come from? Defense orders. Manufacturer orders ex-defense declined 0.1% from the April print (and -6.0% unadjusted). Here are the worst factory orders (ex-defense) since January
[4]
And the monthly and annual change:
[5]
Chart: Bloomberg