By Amara Omeokwe
WASHINGTON–Orders for U.S. manufactured goods fell in November, likely propelled by a steep decline in defense-related orders the month before Congress authorized a fresh round of military spending.
U.S. factory orders decreased 0.7% to a seasonally adjusted $493 billion in November from the previous month, the Commerce Department said Tuesday. Economists surveyed by The Wall Street Journal expected a 0.8% decrease.
The November decline was driven by a drop in new orders for durable goods-items designed to last at least three years, such as appliances, autos and aircraft. Durables orders decreased 2.1% from the previous month, a slightly larger decrease than an earlier estimate of a 2% decline.
Among durables, orders for military equipment in particular declined sharply in November. Orders for defense capital goods, for example, fell 35.6% from October.
Orders for defense and transportation can be volatile from month to month, however. Excluding defense, overall factory orders were up 0.7% in November versus October. Orders excluding transportation rose 0.3%.
Orders for nondurable goods, such as food and clothes, were up 0.6%.
Tuesday’s report covers factory orders placed in November, before progress in trade talks with China and Congress’ passage of a defense-spending bill–developments that could bode well for U.S. manufacturing.
Still, the report follows other recent data that signaled the U.S. manufacturing sector closed 2019 on mixed footing. The Institute for Supply Management reported on Friday that its factory index fell to 47.2 in December from 48.1 in November. Readings above 50 indicate expansion, while those below 50 signal contraction. A separate surveys of purchasing managers from data firm IHS Markit showed U.S. factory activity grew in December, but at a slightly slower pace than in November.
Factory orders for October rose a revised 0.2%, a smaller increase than the previous estimate of a 0.3% rise.
The Commerce Department report on factory orders can be accessed at http://www.census.gov/manufacturing/m3.
(END) Dow Jones Newswires
January 07, 2020 10:15 ET (15:15 GMT)
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