Factory orders down in December, US
Factory orders, i.e. new orders for manufactured goods in the US, dropped notably in December 2013, according to figures released by the Department of Commerce.
The decline was largely driven by a significant fall in orders for transportation equipment.
US factory orders in December declined by 1.5% or $7.2 billion to $489.2 billion, compared to a 1.5% rise in November. Experts had expected a 1.8% December drop and a revised 1.8% November increase.
Orders for transportation equipment fell by 9.7% in December, following an 8.1% rebound in November.
Orders for commercial aircraft and parts saw a particularly steep fall in December (-17.5% decline), with defense aircraft and parts falling by 13.5%. Orders for boats and ships also fell back (-8.1% decline).
Non-transportation factory order rose
Excluding transportation equipment, US factory orders in December increased by 0.2% and by 0.3% the month before.
The non-transportation increase in December factory orders was driven in large part by a 1.1% rise in no-durable goods orders, which had increased by 0.4% in November.
Orders for durable goods declined by 4.2% in December, after having risen by 2.7% in the previous month.
After five successive months of increase, shipments of manufactured goods slipped by 0.2% in December.
After rising slightly (0.1%) in November, inventories of manufactured goods increased by 0.5% in December.
Reuters quotes Gus Faucher, a senior economist at PNC Financial Services in Pittsburgh, who said “Manufacturing will expand at roughly the same pace as the overall economy in 2014. Consumers are gradually increasing their spending, business investment is picking back up again, supporting spending on capital goods.”
Mixed signals on the US economy
Over the last five weeks, published data regarding the US economy have been mixed.
- The Conference Board of Canada forecast last week that the US economy is set for faster growth in 2014.
- The National Association of Realtors reported on January 30th that December pending home sales fell.
- According to the Department of Commerce, the US economy expanded by 3.2% in Q4 2013 and has accelerated since then.
- The Department of Commerce informed last week that although personal spending has increased, personal income remains virtually unchanged.