Factory Orders Retreat After Transitory Boost Last Month

October 2, 2014 Share Print 0

New orders for U.S. factory goods posted their biggest decline on record in August, payback for an aircraft-driven jump a month earlier.

The Commerce Department said on Thursday new orders for manufactured goods dropped 10.1 percent. That was the largest drop in records going back to 1992.

Stripping out transportation orders which were depressed bya plunge in the volatile aircraft component, new orders were down a more modest 0.1 percent.

Economists polled by Reuters had forecast total new orders received by factories would decline 9.3 percent.

The U.S. manufacturing sector continues to expand, although growth may be moderating. The Institute for Supply Management said on Wednesday that its gauge of factory activity showed slower growth in September.

In August, orders for transportation equipment dropped 42.2 percent, a development already made clear in the government’s report on durable goods orders released on Sept 25. In July, aircraft manufacturer Boeing (BA.N) had reported outsized orders, making the decline in August unsurprising.

via Reuters

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Alfonso Esparza

Senior Currency Analyst at Market Pulse

Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.