U.S. factory orders recovered in May after slipping in the previous month, suggesting that the flow of auto parts supplies disrupted by a massive Japanese earthquake is being restored.
The Commerce Department reported Tuesday that orders of manufactured goods rose 0.8 percent in May, helped by a small rise in orders of vehicles and auto parts. Factory orders in April were down a revised 0.9 percent, it said.
The May report contained other encouraging signs, such as a 0.9 percent increase in unfilled orders, an indicator of demand.
Production of parts supplies in Japan was severely disrupted for weeks after the March 11 quake and tsunami, slowing factory output in the United States, as well as Japan.
The quake and its aftermath are expected to cut half a point from second-quarter U.S. gross domestic product growth, Ford Motor Co. senior economist Jenny Lin said Friday as carmakers reported slow U.S sales for June.
The U.S. economy expanded by an anemic 1.9 percent in the first quarter.
“We anticipate that, as production ramps up in the third and fourth quarters, we’ll see a pickup in the overall economic pace,” Lin said.
Japanese automakers recently said they expect to restore output in Japan as well as the United States faster than they originally estimated. Officials with Toyota Motor Corp., which has the biggest U.S. factory network of any foreign-based automaker, say production in Japan is expected to return to normal levels by the end of July. Toyota’s North American output is expected to be back at pre-quake levels in September.
Orders for so-called nondurable goods, such as food, clothing, oil, and plastics, fell 0.2 percent in May. Gas prices have come down since peaking in early May, helping boost demand for autos.
Last week, the private Institute of Supply Management reported a similar trend — a pickup in the pace of the U.S. manufacturing sector’s expansion in June after a slowdown in May.
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