November US Factory Orders Fall

Date: January 09, 2017

Factory Orders Down 2.4 Percent In Biggest Decline Since December 2015


According to the latest Commerce Department data, in November US factory orders fell 2.4 percent. Reuters reported that November’s 2.4 percent decline compared to “an upwardly revised 2.8 percent increase in October” and a forecast of 2.2 percent decline. Reuters says November’s drop “followed four straight months of gains and was the biggest decline since December 2015.” The article said that factory goods were “weighed down by a plunge in the volatile civilian aircraft category, but the underlying trend suggested manufacturing is gradually firming.” Orders for core capital goods “rose 0.9 percent in November as reported last month,” while shipments of those goods “gained 0.2 percent in November as previously reported.” The AP reported that orders “fell for the first time in five months in November, but much of the weakness reflected a swing in the volatile category of commercial aircraft.” A key category that tracks business investment spending posted an increase of 0.9 percent. Meanwhile, orders for durable goods fell 4.5 percent, “only a slight revision from a preliminary report showing a drop of 4.6%,” and orders for nondurable goods “were down 0.2% following a 0.6% increase in October.”

What This Means For Small Businesses

Small businesses have been looking for signals that the economy improved during Q4 2016. Unfortunately, the latest factory orders data demonstrating weakening in orders is not a positive indicator of economic improvement.

Additional Reading

MarketWatch also reported on the latest factory orders data.

Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.

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