Economic Report: U.S. factory orders jump 1.6% in May — but it’s not quite as good as it looks

U.S. factory orders jumped 1.6% in May in a show of strength among manufacturers — but a more recent survey of of top executives suggests demand might be waning in tandem with a slowing economy.

The increase in orders exceeded the 0.6% forecast of economists polled by The Wall Street Journal. The rise in new orders in April was also raised to 0.7% from 0.3%.

Yet a more recent poll of senior manufacturing executives signaled a slowdown in June. An index of manufacturers slipped to a two-year low in June as orders contracted for the first time since the start of the pandemic in spring 2020.

Other indicators also suggest the U.S. economy has softened.

The Federal Reserve is raising interest rates to try to tame the highest U.S. inflation in 40 years. By raising the cost of borrowing, the central bank aims to reduce demand and cool off what had been a rapidly growing economy.

Recent evidence suggests the Fed’s effort it starting to succeed. A growing number of economists even believe the U.S. could sink into recession within a year.

In early Tuesday trades, the Dow Jones Industrial Average

and S&P 500

fell sharply.

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