U.S. Factory Orders Drop for Fourth-Straight Month

Features Reuters

New orders for U.S. factory goods fell for a fourth straight month in November, pointing to a slowdown in manufacturing activity and overall economic growth.

Continue Reading Below

The Commerce Department said on Tuesday new orders for manufactured goods dropped 0.7 percent after an unrevised 0.7 percent fall in October.

Economists polled by Reuters had forecast new orders received by factories falling 0.5 percent.

Manufacturing is cooling after robust growth in the third quarter, in part because of a sluggish global economy. Slowing growth in China and the euro zone, as well as a recession in Japan are crimping demand for U.S. manufactured goods.

Factory activity has also been hampered by a labor dispute at the nation's West Coast ports, which has hit deliveries and curbed inventory accumulation. A survey last Friday showed a manufacturing sector gauge hit a six-month low in December.

But with domestic demand picking up, any slowdown in manufacturing is likely to be temporary.

Continue Reading Below

In November, factory orders excluding the volatile transportation category fell 0.6 percent as demand declined almost across the board. That followed a 1.5 percent drop in October.

Inventories edged up 0.1 percent in November, while shipments fell 0.6 percent, likely reflecting delays moving goods at the West Coast ports. The inventories-to-shipments ratio was 1.32, unchanged from October.

Unfilled orders at factories rose 0.4 percent. Order backlogs have increased in 19 of the last 20 months, showing underlying strength in manufacturing.

The Commerce Department also said orders for durable goods, manufactured products expected to last three years or more, fell 0.9 percent instead of the 0.7 percent drop reported last month.

Another big drop in the value of shipped petroleum products, reflecting declining crude oil prices, saw non-durable goods orders falling 0.5 percent in November after dropping 1.6 percent in October.

Orders for non-defense capital goods excluding aircraft - seen as a measure of business confidence and spending plans - fell 0.5 percent instead of being flat as previously reported.

(Reporting By Lucia Mutikani; Editing by Andrea Ricci)