Factory orders are down to flat at a headline 0.9 percent decline in October with the ex-transportation reading unchanged. The order data are broadly weak showing a big decline for defense goods, a decline in core capital goods, and a third straight decline for consumer goods. The breakdown between durable goods and non-durable goods shows declines for each.
Factory orders began to slow in the third quarter and tripped an unwanted build in inventories, a pattern that is at risk of being repeated in the fourth quarter. But so far inventories are well behaved, up only 0.1 percent in October which is the leanest reading since May.
Other data include a fourth straight marginal increase for shipments, one that isn't pointing to momentum for business activity. One positive in the report is a solid build for unfilled orders, the seventh straight build. A heavy backlog will help manufacturers keep output going even while new orders are soft.
Data on the manufacturing sector have not been telling the same story, with ISM reporting very solid growth in contrast to many other reports that have been no better than flat. But today's factory orders report is the most definitive of all manufacturing reports and points, at least right now, to an unexpected stall out for the sector going into year end.
Factory orders began to slow in the third quarter and tripped an unwanted build in inventories, a pattern that is at risk of being repeated in the fourth quarter. But so far inventories are well behaved, up only 0.1 percent in October which is the leanest reading since May.
Other data include a fourth straight marginal increase for shipments, one that isn't pointing to momentum for business activity. One positive in the report is a solid build for unfilled orders, the seventh straight build. A heavy backlog will help manufacturers keep output going even while new orders are soft.
Data on the manufacturing sector have not been telling the same story, with ISM reporting very solid growth in contrast to many other reports that have been no better than flat. But today's factory orders report is the most definitive of all manufacturing reports and points, at least right now, to an unexpected stall out for the sector going into year end.
