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Factory Orders: Modest Give-back on Month, Trending Towards Less Contraction

January 6, 2017
Bottom Line: Factory orders contracted modestly in November. The 12-month annual rate of change is now nearly flat after contracting over 4% in both 2015 and 2014. The inventory to shipment ratio remained low. Equipment spending was a modest drag on 3rd Quarter GDP -- with this November data the October/November average is modestly below its Q3 level, suggesting another slight decline in equipment spending in Q4.

Factory Orders FELL by 2.4% in November, compared with market expectations for a decline of 2.3%.The prior month's gain was revised higher from 2.7% to 2.8%.

Durable goods orders declined by 4.5%, as previously reported, while nondurable goods orders slipped by 0.2%. Excluding orders for defense goods, civilian aircraft and petroleum products, (so called) core factory orders were nearly unchanged.

Factory orders are now 0.3% BELOW their year ago level and the year-over-year growth rate has rose modestly over the past year (from -3.9% a year ago to the current -0.3%).

The October/November average is modestly below its Q3 level, suggesting a slight decline in equipment spending in Q4.