Manufacturing unit orders slowed markedly in April, climbing simply zero.three%

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Exiger CEO Brandon Daniels provides insight into how the Fed’s rate hikes are affecting the US economy.

US factory orders slowed in April, rising less-than-expected amid ongoing disruptions in the global supply chain — even as consumer demand for goods remained strong.

The Commerce Department said on Thursday that factory orders rose 0.3% in April, falling well short of the 0.7% gain forecast by Refinitiv economists. That’s also a big drop from March, when factory orders rose 1.8%.

INFLATION RISES 8.3% IN APRIL AND FLOWS NEAR A 40-YEAR HIGH

Americans continued to order machinery, automobiles and primary metals in April, but orders for electrical equipment, appliances and components fell 0.2%. Orders for computers and electronic products increased by 0.1%.

Workers lower an R1T truck body onto a chassis on the assembly line at the Rivian electric vehicle plant April 11, 2022 in Normal, Illinois. (Brian Cassella/Chicago Tribune/Tribune News Service via Getty Images/Getty Images)

Meanwhile, shipments of industrial goods rose just 0.2% after rising 2.2% in March. Factory inventories rose 0.6%.

The report also showed that orders for non-defense capital goods — known as core orders, which are seen as a more accurate measure of consumer spending — rose 0.4% in April.

Strong consumer demand for machinery, electronics, automobiles and other durable goods has fueled activity in factories over the past year. But tangled supply chains and persistent labor shortages have weighed on manufacturing — while contributing to the highest inflation in nearly four decades.

The data comes amid broader fears of an economic slowdown: inflation is near a 40-year high, COVID-19 is still forcing lockdowns in China and the Russian war in Ukraine is further exacerbating supply chain disruptions. A growing number of Wall Street companies, including Bank of America, Deutsche Bank and Fannie Mae, are now predicting a recession in the next two years.

Smaller US ports offer a potential solution to supply chain delays. (Stephen Goin / Fox News)

Economic growth in the US is already slowing. The Bureau of Labor Statistics reported earlier this month that gross domestic product contracted unexpectedly in the first quarter of the year, its worst performance since spring 2020, when the economy was still reeling from the COVID-induced recession.

Fed Chair Jerome Powell has acknowledged that there may be some “pain” in cutting inflation and curbing demand, but has balked at the notion of an imminent recession, citing the job market and strong consumer spending as bright spots identified in the economy. However, he has warned that a soft landing is not guaranteed.

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“It’s going to be a challenging task, and it has become even more challenging in recent months due to global events,” Powell said during a recent Wall Street Journal live event, referring to the Ukraine war and the COVID lockdowns in China.

But he added that “there are a number of plausible ways to achieve a soft or soft landing. Our job is not to spoil the chances, but to try to make that happen.”