US factory orders expected to slip in September

Economic IndicatorsAssociated Press

The Commerce Department reports on U.S. factory orders for September. The report will be released Tuesday at 10 a.m. Eastern.

ORDERS SLIP: Economists project that factory orders slid 0.5 percent in September, according to a survey by the data firm FactSet.

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That would follow a 10.1 percent drop in August, when factory orders plunged due a stunning 74.3 percent drop in demand for commercial aircraft. Excluding the volatile transportation category, however, August factory orders nudged down just 0.1 percent.

MANUFACTURING GROWTH: Despite the projected decrease in orders, other manufacturing indicators point toward strengthening factories.

The Institute for Supply Management, a trade group of purchasing managers, reported Monday that its manufacturing index climbed to 59 in October from 56.6 in September. Any reading above 50 signals expansion. The gains match a three-year high previously reached in August and marks a solid rebound from a September decline.

The survey behind the index showed that orders, productivity and hiring each improved at a faster clip in October than the prior month.

Separately, the Federal Reserve reported last month that U.S. manufacturing output rose in September. Factory production rose 0.5 percent in September after falling 0.5 percent in August.

Furniture-making increased 2.4 percent in September, while aerospace products climbed 1.7 percent. Production of clothing, chemicals and computers also improved.

Factories have added 161,000 jobs over the past 12 months. The job gains have helped a solid streak of hiring that has pushed the unemployment rate down to 5.9 percent from 7.2 percent a year ago.

Stronger domestic demand for manufactured goods has offset what appears to be less demand from China and Europe, where an economic slowdown has caused the dollar to rise and make American-made products more expensive for foreign buyers.