Factory orders in the U.S. jump unexpectedly in April

Orders to U.S. factories unexpectedly jumped in April, led by demand for petroleum and chemicals, signaling purchases from abroad are helping sustain manufacturing.

The 1.1% increase followed a 1.5% gain in March that was higher than previously estimated, the Commerce Department said Tuesday in Washington. Bookings excluding cars and airplanes climbed 2.6% for a second month.

Increases in categories such as machinery and electrical equipment indicate that a weaker dollar is making American-made goods more attractive to overseas buyers, helping to keep some factories running. Still, soaring costs for raw materials and a cooling in consumer and business spending will prevent manufacturing from strengthening in coming months.

“This is a solid reading on underlying manufacturing activity,” Bear Stearns economists John Ryding and Conrad DeQuadros said in a note to clients. “The consumer and housing, rather than the factory sector, are bearing the brunt of the downturn in the economy.”

Economists had forecast orders would decline 0.1%, according to Bloomberg News.