Factory Orders Rise by 0.3% in November

orders received by American factories, a key indicator of economic activity, increased a modest 0.3% in November after rising 2% in October, the Commerce Department said today.

Excluding military orders, which tend to fluctuate widely from month to month, the November increase in new orders would have been a more robust 1.1%, following a 0.6% October gain, the department said.

With November’s increase, factory orders totaled $227.73 billion, adjusted for seasonal variations, and were 8.7% above the level of a year ago.

The biggest November increase was in orders for electrical machinery, particularly defense communications equipment, while the largest decline was in orders for transportation equipment other than commercial aircraft, the department said.

Analysts say the economy should continue the present expansion--now in its seventh year--but at a slower pace, which is desirable for avoiding a resurgence of inflation and higher interest rates.

In one sign of slowing, the Index of Leading Indicators, the government’s main barometer of future economic activity, registered a 0.2% decline in November, the department reported last week. But a vibrant manufacturing sector has helped sustain the longest-ever U.S. economic recovery in peacetime as a cheaper dollar has boosted the sale of U.S. exports over the last two years.

More Goods Shipped

Shipments of goods by factories rose 0.5% in November after a 0.7% October rise, while their order backlogs, which have been rising steadily since March, 1987, rose 0.8% in November and 0.9% in October.

Orders for durable goods, the highest priced manufactured items, were unchanged at $122.77 billion after rising 2.9% in October. In a preliminary estimate two weeks ago, the department said durable goods orders rose 0.1% in November.

Non-durable goods orders, including chemicals, textiles and a variety of disposable items, rose 0.6% in November to $104.95 billion after rising 0.9% in October.