Drop in oil prices sends nondurable shipments down 7.4%
Pushed lower by weak demand and falling prices, shipments from U.S. factories plunged a record 5.3% in November, the Commerce Department estimated Tuesday.
Orders for U.S. factory-made goods fell 4.6% in the month, more than twice as much as the expected 2.2% decline. The figures are not adjusted for price changes.
Orders and shipments of nondurable goods dropped a record 7.4% in November, led by a 22% drop in shipments from petroleum refineries. Oil and gasoline prices fell about 20% during the month.
Orders and shipments for most categories of nondurable goods fell sharply in November, in line with falling commodity prices.
Orders for durable goods fell 1.5%, revised from the 1% drop reported two weeks ago.
Factory orders have fallen four months in a row and were down 15.2% compared with the previous November. Orders fell a downwardly revised 6% in October.
The factory orders data begin in 1992.
The data confirm the slump in factory activity seen in other reports, including the Institute for Supply Management index and the Federal Reserve's industrial production report.
Inventories of factory goods fell 0.3%, with the inventory-to-sales ratio rising to 1.41 from 1.33 in October.
Orders were mixed across most durable-goods industries. Transportation orders fell 7.6%, including a 38% drop in aircraft and a 0.1% drop in motor vehicles.
Excluding transportation goods, factory orders fell 4.2%, the fourth straight decline.
Orders for machinery rose 2.4%, while orders for computers and electronics rose 6%.
One bright spot: Orders for core capital equipment - the kind of goods that businesses invest in to update or expand their productive capacity - rose 3.9%, the biggest gain since December 2007.
Orders for consumer durable goods fell 1.3%.
Shipments of durable goods fell 3.1%, with shipments of core capital equipment down 0.2%.
