[WASHINGTON] New orders for US factory goods fell in November and inventories declined for a fifth straight month, the latest indication that economic growth braked sharply in the fourth quarter.
The Commerce Department said on Wednesday new orders for manufactured goods slipped 0.2 per cent after a downwardly revised 1.3 per cent gain in October. The decline was in line with economists' expectations. Orders were previously reported to have increased 1.5 per cent in October.
The report added to weak construction and exports data in suggesting that gross domestic product growth slowed to a crawl in the final three months of 2015 as the economy battled a buoyant dollar, an inventory bloat and relentless spending cuts by energy firms, which have been hurt by lower oil prices.
Economists this week slashed their fourth-quarter GDP growth estimates by as much as one per centage point to as low as a 0.5 per cent annual pace. The economy grew at a 2.0 per cent annual rate in the third quarter.
Manufacturing, which accounts for 12 per cent of the economy, has borne the brunt of the economic headwinds and is likely to remain under pressure, at least through early 2016. A survey on Monday showed manufacturing activity contracted in December for a second straight month.
Orders excluding transportation fell 0.3 per cent in November after edging up 0.1 per cent in October.
The Commerce Department also said orders for non-defense capital goods excluding aircraft - seen as a measure of business confidence and spending plans - fell 0.3 per cent instead of the 0.4 per cent drop reported last month.
Shipments of these so-called core capital goods, which are used to calculate business equipment spending in the GDP report, dropped 0.6 per cent in November instead of the 0.5 per cent decline reported last month.
Inventories of factory goods fell 0.3 per cent after slipping 0.2 per cent in October. The inventories-to-shipments ratio fell to a still lofty 1.35 from 1.36 in October.
There were, however, glimmers of hope, with unfilled orders at factories rising for a second straight month. Shipments rose for the first time in four months.