The Commerce Department reported factory orders declined (-3.7%) in April to $594.6 billion, breaking a four-month streak of increases; this followed a revised (+3.4%) gain in March. Factory orders are up (+2.0%) year over year. Durable goods orders fell sharply (-6.3%) to $296.2 billion, driven by a steep (-17.1%) drop in transportation equipment to $98.7 billion. Excluding transportation, factory orders were down only (-0.5%). Nondurable goods orders decreased (-0.9%) to $298.4 billion. Shipments slipped (-0.3%) to $598.9 billion for the second straight month, with nondurable goods down (-0.9%) and durable goods up (+0.3%). Inventories edged down (-0.1%) to $943.6 billion, following six consecutive monthly increases. Unfilled orders were virtually unchanged at $1.408 trillion, marking gains in 11 of the past 12 months. Core capital goods orders—non-defense capital goods excluding aircraft—declined (-1.5%) in April, and core capital goods shipments decreased (-0.1%).

The May release of the Federal Reserve’s Beige Book reported that economic activity declined slightly overall, with six Districts noting slight to moderate declines, three reporting no change, and three seeing modest growth. Businesses and households remained cautious amid elevated economic and policy uncertainty. Consumer spending was mixed, with most Districts noting flat or slightly weaker demand, though some reported increased purchases of tariff-sensitive goods. Manufacturing activity edged down, while residential real estate sales were generally steady, and new home construction was either flat or slowing. Labor markets showed little change, with most Districts citing stable employment levels, reduced demand, and modest wage gains, even as wage pressures eased. Prices continued to rise at a moderate pace, with higher tariffs contributing to cost increases. Overall, the outlook remained subdued, with businesses expressing a slightly pessimistic and uncertain view of future conditions.

The U.S. Bureau of Labor Statistics reported an increase of 139,000 jobs in May as the unemployment rate held steady at 4.2%. The number of unemployed people changed little at 7.2 million. A year earlier, the unemployment rate was 4.0%, and the number of unemployed was 6.6 million. Job gains were reported in several sectors, with health care adding 62,000 jobs, leisure and hospitality up by 48,000, and social assistance gaining 16,000 positions. In contrast, federal government employment declined by 22,000 jobs. Average hourly earnings grew by 0.4% to $36.24, marking a 3.9% increase over the past year. The labor force participation rate edged down slightly to 62.4%. Meanwhile, long-term unemployment decreased to 1.5 million—20.4% of the total unemployed. Revisions to March and April data showed that 95,000 fewer jobs were added than previously reported.