Manufacturing on the rise in May

{mosads}Orders for new durable goods — products intended to last at least three years — were up 2.1 percent in May, another turnaround for a 2.5 percent April decline.

The report indicates that the impact of the natural disasters in Japan could finally be on the wane, after the fallout from the earthquake and tsunami disrupted global supply chains for months.

It might also give credence to the perspective repeatedly aired by the Federal Reserve, which is that the recent slowdown in the economic recovery is due primarily to temporary setbacks, as opposed to major structural issues.

The Fed trimmed its economic expectations for the next two years at the most recent meeting of the Federal Open Market Committee, but Chairman Ben Bernanke has maintained that the Fed sees the second half of 2011 as a period of stronger economic growth than the first.

Shipments of durable goods grew 0.4 percent in May, after falling 1.4 percent in April.

The economic report came four days after a separate report found the manufacturing industry grew for the 23rd straight month in June. The Institute for Supply Management reported its manufacturing index rose to 55.3 percent in June; any reading above 50 percent is evidence the manufacturing sector is expanding.

It also comes after the stock market enjoyed its strongest week in nearly two years — the Dow Jones Industrial Average closed Friday up 5.4 percent from where it started Monday.

Tuesday’s report began a holiday-shortened week that will end with the Labor Department’s latest report on the state of the jobs market. Friday’s report will be closely watched by financial markets and policymakers, especially given that the previous month’s report fell far short of expectations in both the unemployment rate and the number of jobs created in the private sector.