A new report on manufacturing today provides strong evidence that April may have been the bottom of the ongoing recession in manufacturing.

Durable goods shipments increased 3.1% in May after a steep 3.8% plunge in April. Similarly, orders rose 2.9%, offsetting half of the huge 5.5% drop in April. Sales and orders for non-durable (consumer packaged goods) have been steady.
The shipments gain was mostly cars, trucks and planes, but every industry, except computers and communications equipment, was up from April. The large gain in orders was split between motor vehicles (the rebates are working) and semiconductors. Semiconductor orders are still down 30% since the beginning of the year.
Durable goods inventories fell 0.5% in May, shrinking the inventory/sales ratio to 1.58 from 1.64. This is still too high. 1.45 to 1.5 is probably the target for durable goods manufacturers, so inventories will need to be reduced further in June and July before production and freight recover fully to the level of final consumption.