November Factory Orders

November Factory Orders were released today and came out better than expected.  Factory orders measures the change in the total value of new purchase orders placed with manufacturers.  Rising purchase orders is considered a leading indicator of production.  The forecasted called for a number of -0.1%, but the actual headline number came in at 0.7% (beating Octobers number of -0.7% as well).  The report had the following breakdown in new orders:

New orders for manufactured durable goods in November decreased $2.6 billion or 1.3 percent to $193.7 billion, the U.S. Census Bureau announced today.  This decrease, down three of the last four months, followed a 3.1 percent October decrease.  Excluding transportation, new orders increased 2.4 percent.  Excluding defense, new orders decreased 2.3 percent.

It would seem defense is supporting factory orders and transportation is still suffering.

Transportation equipment, also down three of the last four months, had the largest decrease, $6.2 billion or 11.9 percent to $45.5 billion. This was due to nondefense aircraft and parts, which decreased $6.6 billion.

Inventories are up for eleven months straight with transportation having the largest increase in eleven months of $1.1 billion or 1.3% to $84.3 billion.  Increasing inventories is not a good sign.  After reading the report, I would say this actually wasn't a good report (especially for transports).