Factory orders fell by 0.8% in June

WASHINGTON (AP) - companies reduce orders for aircraft, cars and heavy machinery in June, reducing the demand for products of the factory for the second time in three months.The Ministry of Commerce said Wednesday that orders to U.S. factories were 0.8% in June. A key category that tracks investment plans business managed a small increase, offering a positive sign in other gloomy reports on the economy.The high prices of energy and the supply disruptions caused by the crisis of the Japan the slowed production this spring, with the economy.The overall demand for goods from the factory fell to 440.7 $ billion in June. It still is 31.2% higher that the lowest point during the recession reached in March 2009.Manufacturing was one of the strongest areas of the economy since the end of the recession. But the activity slowed this spring.Plants had their lowest growth in two years in July, according to the Institute of supply management. The Group of purchasing executives, said its index fell to 50.9, the lowest reading since July 2009. Any reading above 50 indicates expansion.Orders for capital goods of nondefense excluding aircraft, the category that serves as a proxy for business investment plans have shown an increase of 0.4% June. Representing a revision upward from an estimated last week that this category fell 0.4% in June.The report also slightly revised durable goods decreased to show a decrease of 1.9%. It is a little better that the 2.1% drop the Government reported last week. Durable goods are items which should last at least three years.Orders for nondurable goods, of products such as gasoline, chemicals, food and paper, showed no change from the previous month after a decline of 0.5% of the application of May.Business transportation equipment fell 8.6%, reflecting a decrease in 28.9% of the orders of commercial aircraft and a 2.7 percent decline in orders for automobiles and auto parts.Manufacturers of motor vehicles and other American companies that depend on the components of the Japan were injured by the disturbance in the supply chain.Analysts expect manufacturing and the global economy to pick in the second half of the year once stabilize energy prices and Japanese factories resumed normal production.But it is unlikely that if consumers remain concerned about the economy slipping into another recession.American consumers to reduce spending in June for the first time in nearly two years, while their income rose by the smallest amount in nine months. Consumer spending fuels about 70% of economic growth.Companies have responded by reducing hiring. The economy added just 18,000 jobs in June, less than nine months, and the unemployment rate is 9.2%, the highest throughout the year. The Government will issue July figures Friday.The global economy expanded at an annual rate of 1.3% in the quarter April-June after only 0.4% of growth in the first three months of the year. It was the period of six months slow six recession ended two years ago.Many economists believe economic activity will accelerate only modestly in the second half of the year. Some predict growth of around 2.5% in the last six months. It would be well below the pace necessary to make a significant breakthrough in the unemployment rate.