Another report is showing mixed results in factory activity in the United States. The U.S. Department of Commerce has shown that factory orders rose by 1.5% (by $6.8 billion) in October to $473.9 billion. Bloomberg had its Econoday consensus estimate at 1.4%, and the report from September was revised to -0.8% from a prior -1.0%.
Thursday’s report is unlikely to be a major factor in the Federal Reserve’s ultimate decision on interest rates later in December. After all, they already have more recent data to consider.
Shipments are now down in six of the past seven months. This reading fell by some $2.5 billion, or 0.5%, to $475.2 billion. September’s decrease was by 0.3%.
Unfilled orders were up after two consecutive monthly decreases. That portion of the report was up $3.4 billion, or 0.3%, to $1.1918 trillion. This unfilled orders report followed a 0.5% drop in the month of September. The unfilled orders-to-shipments ratio was 6.94, up from 6.86 in September.
Inventories have now been down in four consecutive monthly reports. November’s inventories were down by $0.6 billion, or 0.1%, to $643.6 billion. September’s decrease was by 0.5%. The inventories-to-shipments ratio was 1.35, unchanged from September.
What really stands out here is that transportation was the leader for new orders, and that implies what will dominate in the months ahead. Thursday’s report from the Commerce Department showed that transportation equipment was up by 7.9%, or $6.0 billion, to $82.0 billion. This was also up following two consecutive monthly decreases.
Again, this report is unlikely to have much influence over the Fed’s decision to hike interest rates. Much of this data, on a directional basis, already has been seen in more recent reports.
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