US factory orders rise but outlook uncertain

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    Automobile engines as they make their way through the assembly line at the General Motors (GM) manufacturing plant in Spring Hill, Tennessee. (Reuters Photo)

    WASHINGTON- New orders for US-made goods increased solidly in September, but further gains could be limited amid an anticipated slowdown in consumer spending as government money for businesses and workers impacted by the COVID-19 pandemic runs out.

    The Commerce Department said on Tuesday that factory orders rose 1.1 percent after climbing 0.6 percent in August. Orders were boosted by increased demand for primary metals, computers and electronic products as well as motor vehicles and fabricated metal products. But orders for machinery, furniture and electrical equipment, appliances and components fell.

    Economists polled by Reuters had forecast factory orders would rise 1.0 percent in September.

    Manufacturing, which accounts for 11.3 percent of US economic activity, has been boosted by a shift in spending from services toward goods as Americans set up home offices and remote classrooms and avoid public transportation because of the coronavirus.

    A survey on Monday from the Institute for Supply Management on Monday showed its measure of national factory activity raced to its highest level in nearly two years in October, with new orders surging to their highest level in almost 17 years.

    But the strong manufacturing sentiment likely overstates the health of the sector. A report from the Federal Reserve last month showed production at factories dropped 0.3 percent in September and remained 6.4 percent below its pre-pandemic level.