According to new information released by the Commerce Department, new orders for U.S.-manufactured goods accelerated significantly in November, while business spending on equipment seemed to struggle to rebound in the fourth quarter.
The report, released this past Thursday, showed that American factory orders rose 1.6% in November. Data for October was revised higher to show orders rising 1.2% instead of 1.0% as previously reported. Many economists had forecast factory orders advancing by 1.5%. Orders increased 12.9% on a year-on-year basis.
Much of this increase comes as businesses work to replenish their depleted inventories. There were significant increases in orders for computers and electronic products, as well as transportation equipment. However, orders for machinery fell, as did those for electrical equipment, appliances, and components.
There are tentative signs that raw material and labor shortages are starting to come under control. An Institute for Supply Management survey on Tuesday showed its measure of prices paid for inputs by factories fell by the most in a decade in December. Meanwhile, shipments of manufactured goods increased by 0.7% in November after surging 2.0% in October. Inventories at factories also rose by 0.7%, while unfilled orders increased 0.7% after gaining 0.3% in the prior month.
The Commerce Department also reported that orders for non-defense capital goods, excluding aircraft, which are seen as a measure of business spending plans on equipment, were unchanged in November instead of falling 0.1% as first reported last month. Shipments of these so-called core capital goods, which are used to calculate business equipment spending in the gross domestic product report, rose 0.3% in November as was previously reported. Business spending on equipment contracted in the third quarter after four straight quarters of double-digit growth.