U.S. Factory Orders Fall Again

Dropped 0.8% in November, Third Dip In Last Four Months

(CBS MarketWatch)  Orders placed with U.S. manufacturers fell for a third month in four in November, the Commerce Department reported Tuesday.

Factory orders fell 0.8 percent that month, according to government calculations. The decline exactly matches the average forecast in a survey of economists by CBS MarketWatch.com.

Without defense orders, the decline would have been steeper.

October factory orders rose 1.4 percent, only modestly revised from the 1.5 percent gain first reported. For the year to date, orders were 1.1 percent below the tally through November a year ago.

The key non-defense capital goods component of the November report showed a 3.6 percent decline in orders. The Federal Reserve is keeping close tabs on business investment, which has so far remained subdued as many companies struggle with profitability.

But more recent data from the factory sector - the Institute for Supply Managers December index released last week - showed a rebound in the factory sector last month.

Purchasing managers reported an expansion in business for the first time in several months rallying the stock market and lifting bond yields in anticipation the recovery could carry more punch this year.

Economists remain cautiously optimistic the recovery and factory sector improvement are on track, but probably will still see some trouble spots over the coming months.

Meanwhile, factory orders minus those for the transportation sector fell 0.7 percent in November. Demand for cars and parts fell 0.9 percent from a month earlier. Orders ex-defense fell 1.3 percent.

Durable goods orders minus Pentagon orders dropped 2.4 percent, the second decrease in the last three months. Capital goods for military use surging nearly 28 percent that month.

Unfilled orders were down 0.9 percent in November. Inventories slipped 0.3 percent - the biggest drop since May.