US factory orders for October mark most significant decline in over 3years
Date
12/6/2023 3:45:48 AM
(MENAFN) Recent data has revealed a substantial downturn in US factory orders for October, marking the most significant decline in over three years. The report, released by the US Department of Commerce, indicates that weakened demand for durable goods and transportation equipment contributed to a 3.6 percent drop in factory production, the largest since April 2020. This decline follows a notable 2.3 percent rise in September, underscoring concerns that the impact of elevated interest rates is starting to reverberate through the economy.
Economists, anticipating a decline, were taken by surprise as the actual figures surpassed expectations. According to the revised data, analysts polled by Reuters had predicted a 2.8 percent decrease in orders, but the actual decline was more pronounced at 3.6 percent. Year-on-year, orders saw a modest increase of 0.5 percent in October.
The sharp contraction in industrial demand was particularly evident in the durable goods category, which experienced a substantial 5.4 percent decline after a 4 percent increase in the previous month. Demand for transportation equipment took a significant hit, plummeting by 14.7 percent. Additionally, non-durable goods recorded a decline of 1.4 percent following a 0.6 percent rise in the prior month.
This data reinforces the growing perception that the US economy is grappling with the effects of heightened interest rates. The intricate interplay of factors, including weakened demand for goods and challenges in specific sectors, highlights the delicate balancing act faced by policymakers as they navigate the evolving economic landscape. As concerns about economic resilience persist, market participants will closely monitor future indicators for insights into the trajectory of US economic recovery.
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