Manufacturing Continues to Recover, If Somewhat slower

While reports indicate that factor orders increased for the 10th month out of the past 11, inventories grew at a slower rate than anticipated indicating continued caution on the part of companies. The bright spots are in investments in manufacturing equipment that suggest a growing recovery in manufacturing capacity. Also manufacturing hiring continued to decline, reinforcing trend toward labor productivity. A key indicator to watch for is when firms begin to hire which will signal a shift to corporate optimism.