New Factory Orders Fall In November

New factory orders for November fell 0.6 percent which is just below Econoday's consensus range and reflects the month's abrupt $20 drop in oil from $70 to $50. Largely reflecting related price effects, orders for non-durables, the new set of data in today's report, fell 1.9 percent to more than offset a solid aircraft boosted rise of 0.7 percent in durable goods orders (revised from 0.8 percent in advance data for this report released in late December before the government shutdown and closing of the Census Bureau).

New orders for core capital goods (nondefense ex-aircraft) fell an unrevised 0.6 percent after a 0.5 percent rise in October with November shipments revised 1 tenth lower to a 0.2 percent decline following, however, a 0.8 percent October increase. These are mixed indications for business investment in the fourth-quarter.

Total shipments, like orders, fell 0.6 percent in November and were down 0.1 percent in October with November unfilled orders edging 0.1 percent lower following a 0.2 percent dip. A specific negative for fourth-quarter GDP will be a 0.1 percent decline in inventories which, given the even sharper drop in new orders, lifted the inventory-to-shipments rate 1 tenth to a less lean 1.35.

Today's report closes the book on what was a November with perhaps more weaknesses than strengths, and though previously released manufacturing data from the Federal Reserve are pointing to a big rebound for December, the verdict won't be final until this report for December is released. Date for the December release, which like today's report for November was delayed by the government shutdown, has yet to be released.