Economists surveyed by Bloomberg News had expected November 2008 factory orders to decline 2.5%. Factory orders decreased 6.0% in October 2008.
Factory orders have now declined for four consecutive months and have declined 15.2% in the past year.
Economist Peter Dawson said the November 2008 factory order data "is more evidence of continued, broad weakness in the U.S. economy, stemming from decreased demand from both U.S. and international sources."
In November 2008, shipments plunged 5.3%, orders and shipments for non-durable goods fell 7.4%, driven lower by a 22% decline in shipments from petroleum refineries. Meanwhile, durable goods orders declined a revised 1.5%, compared to the 1% decline announced two weeks ago.
Economists follow the factory orders statistic because it provides one of the most comprehensive surveys of advance orders for durable goods -- how busy factories are likely to be in the period ahead. Factory orders also are a major value-added component of the U.S. economy.
Economic Analysis: Obviously, factory orders continue to show a U.S. economy in recession. The U.S. manufacturing sector has been contracting since late 2007 and there's little in the November 2008 report to suggest a manufacturing upturn is likely in Q1 2009. Demand is light almost universally -- across the U.S. economy -- a major reason Congress is preparing a large fiscal stimulus package.
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