WASHINGTON (Reuters) – New orders for U.S.-manufactured goods fell in November while business spending on equipment appeared to have slowed in the fourth quarter, government data showed on Monday.
Factory orders dropped 0.4% after an upwardly revised 0.5% gain in October, the Commerce Department’s Census Bureau said. Economists polled by Reuters had forecast factory orders slipping 0.3% after a previously reported 0.2% rise in October. Factory orders edged up 0.1% year-on-year in November.
Manufacturing, which accounts for 10.3% of the economy, has struggled in the aftermath of the Federal Reserve’s aggressive monetary policy tightening in 2022 and 2023 to curb inflation.
A recovery is likely this year as the U.S. central bank cuts interest rates, which was underscored by an Institute for Supply Management survey last week showing its Purchasing Managers Index rising to a nine-month high in December. Factory production rebounded after contracting for months, the survey showed.
A pledge by President-elect Donald Trump’s incoming administration to cut taxes could also provide a boost, but other policy promises, including higher tariffs on imported goods, could raise prices of raw materials.
The government also reported that orders for non-defense capital goods excluding aircraft, which are seen as a measure of business spending plans on equipment, increased 0.4% in November. They were revised down from the previously reported 0.7% rise.
Shipments of core capital goods advanced 0.3% instead of 0.5% as estimated last month.
Nondefense capital goods orders slipped 0.9%, rather than 0.6% as initially reported. Shipments of those goods dropped 0.9% rather than by the previously estimated 0.8%. Weak shipments suggest softer business investment in equipment in the fourth quarter after two straight quarters of strong growth.
(Reporting by Lucia Mutikani; Editing by Andrea Ricci)
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