Factory Orders Jump

- Factory Orders for April rose 1.1% versus estimates of a .1% decline and an upwardly revised 1.5% gain in March.

BOTTOM LINE: Orders to US manufacturers unexpectedly jumped in April, Bloomberg reported. Bookings excluding cars and airplanes, surged 2.6% for a second month. Bookings for non-defense capital goods excluding aircraft, a gauge of future business spending, jumped 4% in April. Shipments of those goods, which are used to compute GDP, rose .2% after a .8% increase in March. Total shipments in April rose 2.2%, the most since December 2006. That left the amount of goods on hand at 1.23 months’ worth at the current sales pace versus 1.26 months in March. Federal Reserve Chairman Bernanke said today that rates are “well positioned” to promote growth and stable prices, and that policy makers are “attentive” to the impact of the falling dollar. The second quarter is “likely to be relatively weak,” he said, omitting his mention in the April speech of a possible contraction. The second half may have “somewhat better economic conditions,” and growth may pick up further in 2009, Bernanke said. The US Dollar Index is jumping .52% and the 10-year yield is rising 4 basis points to 4.0% on today’s news. I expect Factory Orders to trend higher through year-end.