The Census Bureau said that new factory orders rose by 1.3 percent in November, accelerating from the softer 0.4 percent gain seen in October. The boost to orders in the latest data included large jumps in nondefense (up 14.7 percent) and defense (up 12.4 percent) aircraft and parts sales. It is important to note that aircraft orders can be highly volatile from month to month, and the November data include robust demand from the Dubai Airshow. Excluding transportation equipment, new orders for manufactured goods were up 0.8 percent, rising for the fifth consecutive month.
Overall, new factory orders – which have struggled mightily over the past couple years – have largely trended in the right direction more recently, up nearly 8.0 percent since November 2016, or 7.6 percent with transportation equipment sales excluded.
Looking specifically at durable goods activity in November, the data were mixed but higher on net. Demand was stronger for furniture and related products (up 1.6 percent), motor vehicles and parts (up 1.1 percent), primary metals (up 0.9 percent) and electrical equipment and appliances (up 0.6 percent). In contrast, there were reduced orders for machinery (down 1.0 percent), computers and electronic products (down 0.5 percent) and fabricated metal products (down 0.2 percent). Core capital goods—or nondefense capital goods excluding aircraft—edged down by 0.2 percent in November, but, much like the headline numbers, there was a healthy gain of 8.0 percent over the past 12 months. This is important as core capital goods are often seen as a proxy for capital spending in the U.S. economy.
Meanwhile, shipments of manufactured goods increased by 1.2 percent in November, up for the seventh straight month. Durable and nondurable goods orders were up by 0.9 percent and 1.4 percent, respectively. On a year-over-year basis, factory shipments have risen 7.3 percent since November 2016, or 7.6 percent with transportation excluded.
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