Factory Orders: New Orders Decline Slightly
January 6, 2016
Factory Orders FELL by 0.2% in November, in line with market expectations. The prior month's gain was revised lower from 1.5% to 1.3%. Durable goods orders were unchanged, as previously reported, while nondurable goods orders declined by 0.5%. Excluding orders for defense goods, civilian aircraft and petroleum products, (so called) core factory orders were UNCHANGED. Factory orders are now 4.2% BELOW their year ago level and the year-over-year growth rate has declined modestly over the past year (from -1.5% a year ago to the current -4.2%). Nondefense Capital Goods Shipments and Nondefense Capital Goods Shipments excluding aircraft, proxies for capital spending, FELL, by 2.3% and by 0.5%, respectively The October/November average is modestly below its Q3 level, indicating a modest decline in, capital spending, in Q4. Factory Inventories FELL by 0.3% and the Inventory-to-Shipment Ratio FELL to 1.35 from 1.36, still sharply above its post-recession cyclical nadir of 1.26 reached in July 2011. Bottom Line: Factory orders declined slightly in November, in line with expectations. The growth rate has been declining over the past 13 months and is now -4.2% year-over-year. Durable goods orders were unchanged while non-durable goods orders declined slightly.
Article by contingentmacro