Plus: Unemployment Rate Edges Up and U.S./Mexico Cross-Border Trucking Dispute Resolved.

Factory Orders Rise
Following a 0.9 percent drop in April, United States factory orders rose 0.8 percent in May, according to the U.S. Department of Commerce last week. The increase pushed the total value of new factory goods orders to $445.3 billion in May.

“The increase was broad-based, with gains in a variety of industries,” the Wall Street Journal reports. “Yet economists surveyed by Dow Jones Newswires had forecast a 1 percent rise in overall factory orders.”

Transportation equipment had the largest increase — 6.3 percent — to total $49.9 billion.

“Much of the increase was driven by a 36.5 percent increase in orders for aircraft, a volatile category. But there were also signs of strength in areas that had slowed sharply in the previous month,” the Associated Press notes. “Auto and auto parts orders rose 2 percent. And a measure of business investment rose 1.6 percent, after falling 0.4 percent the previous month. Companies invested more in computers and equipment.”

Excluding transportation, new orders edged up 0.2 percent after a similar gain the prior month.

Meanwhile, shipments inched forward 0.1 percent after falling 0.4 percent in April. Inventories increased 0.8 percent in May to $593 billion, the highest level since the series started in 1992. Unfilled orders rose 0.9 percent, the biggest increase since September, after a 0.6 percent gain in April.

Unemployment Rate Rises
The U.S. economy netted a mere 18,000 new jobs in June, the fewest since September, and the unemployment rate rose to 9.2 percent, the highest in 2011, according to the unemployment report released by the U.S. Department of Labor last week.

As the Associated Press explains, the economy needs to add about 125,000 jobs per month to match population growth and 250,000 jobs to lower the unemployment rate.

Manufacturing employment remained relatively unchanged last month. Following gains totaling 164,000 between November 2010 and April 2011, employment in this industry has been flat for the past two months.

Many economists had expressed optimism preceding the June figures’ release, with some experts forecasting job gains as high as 90,000, Reuters notes. Facing June’s dismal report, many economists are expressing disappointment.

“June’s employment report doesn’t have a single redeeming feature,” Paul Ashworth, an economist at Capital Economics, told AP. “It’s awful from start to finish.”

Others were equally adamant in tempering their reactions. John Canally, an economist and investment strategist at LPL Financial, tried to put the figures in perspective: “You don’t want to read too much into one report,” he told Reuters. “People were bracing for a strong number, got a weak one, and that’s usually bad news for stocks and good news for Treasuries.”

U.S. and Mexico Resolve Cross-Border Trucking Dispute
The U.S. and Mexico have resolved the dispute over long-haul, cross-border trucking services between the two countries. The signing of the agreement “paves the way” for Mexico to lift retaliatory tariffs it imposed more than two years ago on more than $2 billion in U.S. manufactured goods and agricultural products, according to an announcement of the agreement.

The agreement also provides that Mexico will suspend half of the retaliatory tariffs within 10 days. Mexico will suspend the remaining 50 percent of the tariffs within five days of the first Mexican trucking company receiving its U.S. operating authority. As a result, Mexican tariffs that now range from 5 percent to 25 percent on various U.S. agricultural and industrial products — such as apples, pork products and personal care products — will be immediately cut in half and will disappear entirely within a few months.

Based on feedback from safety advocates, industry representatives, lawmakers and others, trucks will be required to comply with all Federal Motor Vehicle Safety Standards and must have electronic monitoring systems to track hours-of-service compliance. In addition, the U.S. Department of Transportation will review the complete driving record of each driver and require all drug-testing samples to be analyzed in Department of Health and Human Services-certified laboratories located in the U.S. Moreover, drivers will be assessed for their ability to understand the English language and U.S. traffic signs. The new agreement also ensures that Mexico will provide reciprocal authority for U.S. carriers to engage in cross-border long-haul operations into that country.