New orders for manufactured goods in the US plunged 3.9% in the month of December, a record 5th straight monthly decline. The contraction follows a downwardly-revised record 6.5% drop in orders in November and a 6.0% drop in October. The data, first reported by the Commerce Department, is worse than expected, as economists were expecting a number closer to 3.3%.

Fred Graph

Orders for core capital equipment goods, the kind of tools businesses invest in order to expand or update their productive capacity, fell 3.2% in December, after gaining a surprising 1.1% the previous month.

Fred Graph

Orders for durable goods decreased a revised 3.0% in December, down slightly from 2.6% drop estimated a week ago. Durable goods orders fell 4% in November. Orders for nondurablegoods fell a 4.8% for the month, after a record 8.7% drop in November.

There is no silver lining to this report, as manufacturers’ orders fell en masse. No industry was spared from the demand destruction. Even core capital equipment, which was initially up 3.9% in November, reversed course and erased any gains. Just keep one thing in mind, though. The figures are not adjusted for any price changes. And considering that we’ve experienced pretty drastic price deflation in the past few months, that is sure to misrepresent the data. So maybe the report was overstated some, or maybe that’s just wishful thinking.

Report Details

Via MarketWatch:

Orders for machinery fell 5.7% in December, compared with a drop of 2.8% in the prior month. Orders for computers and electronic products fell 6.5%, compared with a rise of 4%.

Orders for transportation equipment fell 0.2%, as orders for nondefenseaircraft and parts plunged 43.8%. In November, transportation orders fell 9.9%, with nondefenseaircraft and parts down 46.2%. Orders for motor vehicle bodies, parts and trailers fell 5.7% in December, compared witha drop of 2% in the prior month.

Nondurablegoods orders in December fell 4.8%, compared with8.7% in the prior month.

Shipments of manufactured goods in December fell 2.9%, declining for five consecutive months in the longest streak since 1998. In the prior month shipments fell 6.5%.

Inventories in December fell 1.4%, the largest decline since comparable has been published. In the prior month, inventories fell 0.5%.

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