Durable Goods drop 1% in November

From Yahoo! Finance: Durable Goods drop 1 percent in November

Orders to U.S. factories for big-ticket manufactured goods fell for the fourth consecutive month in November, and a steady rise in inventories suggests production will need to be cut further.

The drop in durable goods orders, while smaller than expected, revealed persistent weakness for the auto industry and a big decline in demand for commercial aircraft. Analysts believe manufacturing will not rebound until the broader economy does -- at the earliest, in the middle of next year.

The Commerce Department reported Wednesday that orders for durable goods fell 1 percent last month, a decline that was smaller than the 3 percent decrease economists had been expecting. However, the decrease was on top of an 8.4 percent plunge in orders in October, which had been the biggest decline in eight years.

The weakness in November reflected a big 37.7 percent fall in demand for commercial aircraft and a smaller 0.2 percent drop in orders for new vehicles and auto parts.

Total transportation orders dropped by 7.4 percent in November. Excluding the big decline in transportation, total orders rose by 1.2 percent in November, the best showing since last June. However, this gain was expected to be only a temporary upward blip as the prolonged recession continues to cut into demand for factory products.

Strength was shown in demand for machinery, which rose by 4.1 percent, and computers and other electronic products, which posted a 5.9 percent increase. But orders for primary metals such as steel fell by 2.9 percent.

Total inventories of durable goods rose by 0.5 percent in November, the 16th increase in the past 17 months. That is likely to spell trouble in the months ahead as manufacturers slash production further in an effort to get inventories more in line with falling sales.