Oct. Factory Orders Rise 2.7%; Ex-Transportation Up 0.8%

WASHINGTON – The value of new factory orders rose by 2.7% in October, slightly behind the 2.8% gain forecasted as nondurables orders rose 0.9%, but durable goods orders were revised lower to a 4.6% increase from the 4.8% jump in the advance estimate, data released by the Commerce Department Tuesday morning showed.

Total factory orders excluding transportation rose 0.8% in October, while durable goods orders excluding transportation were also up 0.8% in the month, a downward revision from the 1.0% increase in the advance estimate.

Transportation orders rose 12.0% in October based on Tuesday's data, unrevised from the advance estimate. Nondefense aircraft orders rose by 93.8% in October, while defense aircraft orders were up 32.5%. Providing some partial offset to the airline gains, motor vehicles orders fell 0.7% in October and orders for ships and boats declined 1.1%.

Petroleum and coal products shipments rose by 6.2% in October, leading the further increase in nondurables orders. Nondurables shipments are equivalent to orders in this report.

Nondefense capital goods new orders rose 14.4%, but were up only 0.2% when a 138.5% gain in the civilian aircraft category is excluded.

Overall factory shipments were up 0.4% in the month, while nondefense capital goods shipments were fell 0.8%. Excluding the civilian aircraft component, nondefense capital goods shipments were down only 0.1%.

Factory inventories were flat in October at the same time that shipments posted a modest gain, so the inventory-to-shipments ratio held steady at 1.34.

The Commerce Department's advance report on inventories showed 0.4% declines for both wholesale and retail inventories in October. While these data are eligible for revision, the levels as they stand now, combined with Tuesday's factory inventory data, would result in a 0.2% decline in October business inventories when that report is released on December 14, an MNI calculation showed. The revised wholesale data for October will be released on December 9 and could alter this projection.

Market News International is a real-time global news service for fixed-income and foreign exchange market professionals. See www.marketnews.com.

Market News International is a real-time global news service for fixed-income and foreign exchange market professionals. See www.marketnews.com.
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