Factory orders rebounding in May that shipments of edge until

An employee of the automobile manufacturer Toyota moves a motor to Toyota in Huntsville Alabama engine assembly line, on 13 November 2009.

Credit: Reuters/Carlos BarriaBy Lucia Mutikani

WASHINGTON. Tue, July 5, 2011 12: 00 am EDT

WASHINGTON (Reuters) - received by the factories of new bounced orders in may, pointing to an underlying strength in increase the demand for transportation equipment manufacturing and a range of other products.

The Commerce Department said Tuesday that orders for manufactured goods increased 0.8 percent after a 0.9% drop in April. Economists had expected a rebound of 1.0%.

Activity, which resulted in the economic recovery, the manufacture has been arrested by the disturbances of chain of supply by the earthquake of March to the Japan. But recent data, including the Institute of management of the activity of plant output June Friday, suggests the standardization of the activity.

"The clash of the Japan begins to facilitate, the question is what bounce back will be in the second half, and when we are going to get the full impact,"said Neil Dutta, an economist at the Bank of America Merrill Lynch in New York."

"It will probably happen later in the third quarter."

The economy is displayed at the height of the momentum to find after slowing sharply in the first half of the year. However, a report on the employment of June due Friday is expected to show continued weakness in the labour market.

The Department of Commerce report showed orders excluding transportation edged 0.2 per cent in may gain the previous month after a similar.

Unfilled orders increased by 0.9%, the largest increase since September, after a gain of 0.6% in April.

The book orders increase highlighted the disruption of supply, of Japan and Mills proposed will have to increase production to clear the backlog.

Shipments edged up 0.1% after falling 0.4% in April. Inventories increased by 0.8% in May to 593.0 billion, which is the highest level since the series began in 1992.

The Department said orders for durable goods, costly manufactured goods expected to last three years or more, rose 2.1%, marking a revision to the increase in the reported 1.9% last month.

However, the increase in orders for capital goods non-la defence other than aircraft - seen as a measure of confidence and business spending plans - was not revised to 1.6%, while deliveries of such goods have been revised to a gain of 1.8% to 1.4%.

The positive impact of remittances on domestic product gross of second quarter was offset by a decline in stocks of non-durable manufactured goods.

"The weakness reported in non-durable inventories adds some risk with our forecast of growth of GDP second quarter,", said Daniel Silver, an economist at JPMorgan in New York.

"However, less accumulation of inventories in the second quarter could mean that the contribution of inventories in the third quarter may be stronger than expected."

In the second quarter GDP growth estimates range between 1.5% and the annual rate of 2%. The Government publishes its first reading, second-quarter growth on July 29.

(Reports by Lucia Mutikani;) (Editing by Andrew Hay)