Factory Orders Highlight U.S. Consumer Strength

DEARBORN, MI - SEPTEMBER 27: Ford Motor Company worker Nikki Hughs works on a Ford F150 truck on the high-line at the Ford Dearborn Truck Plant on September 27, 2018 in Dearborn, Michigan. The Ford Rouge Plant is celebrating 100 years as America's longest continuously operating auto plant. The factory …
Bill Pugliano/Getty Images

Factory orders for consumer goods rose in November, the first monthly improvement since July and an indication that the manufacturing sector may be finding its footing after months of uneven performance and signs of slumping.

Consumer goods orders were up 0.8 percent in November, the Commerce Department said Tuesday in its expanded report on November manufacturing in the United States. Orders for durable goods, those expected to last three years or longer, rose by one percent. Orders for nondurables climbed 0.8 percent.

Durable consumer goods orders had been down sharply in prior months, falling 1.4 percent in October, 3 percent in September, and 0.9 percent in August.

A proxy for business investment, which strips out defense and aircraft orders, was up 0.2 percent, the second consecutive monthly gain after October’s 1 percent climb.

The improvement was broad. Orders were up for construction materials, motor vehicles and parts, and construction materials all rose in November, rebounding from declines in the prior month. Orders for computers were up 8.9 percent on a seasonally adjusted basis, the fourth consecutive monthly increase and the highest gain of the recent surge.

Orders for household appliances rose 4.7 percent, likely reflecting strong consumer confidence as well as recent strength in the housing market. Homebuyers often purchase new appliances.

Shipments, another gauge of manufacturing activity, for cars rose 0.7 percent and orders for light trucks, which includes sports-utility vehicles popular with many American consumers, rose 1.7 percent.

Orders for industrial machinery were up 6.0 percent, a surprising strengthening for an economically important category now in an eight-month growth streak.

Despite these increased orders, overall U.S. factory orders fell 0.7 percent in November, pulled down by declines in aircraft orders and defense orders. The defense category fell 35.6 percent in November while nondefense aircraft orders dropped 6 percent.

 

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