U.S. factory orders tumble in November on aircraft
WASHINGTON, Jan 6 (Reuters) - New orders for U.S.-manufactured goods fell more than expected in November amid a sharp decline in bookings for aircraft, while higher borrowing costs cooled demand for other goods.
The Commerce Department said on Friday that factory orders dropped 1.8% after gaining 0.4% in October. Economists polled by Reuters had forecast orders falling 0.8%. Orders increased 12.2% on a year-on-year basis in November.
The Federal Reserve's fastest interest rate-hiking cycle since the 1980s as it battles inflation is slowing demand for goods, which are typically bought on credit. Americans are also shifting spending away from goods to services as the moves to a post-pandemic era.
An Institute for Supply Management survey this week showed its measure of the 's factory activity contracted for a second straight month in December. Manufacturing accounts for 11.3% of the U.S. economy.
The plunge in factory orders was driven by a 6.3% drop in bookings for transportation equipment, which followed a 1.9% increase in October. Transportation equipment orders were weighed down by a 36.4% tumble in orders for civilian aircraft.
Orders for defense aircraft fell 8.6%. Motor vehicle orders rose 0.6%. There were moderate gains in orders for machinery, computers and electronic products as well as electrical equipment, appliances and components.
The Commerce Department also reported that orders for -defense capital goods, excluding aircraft, which are seen as a measure of business spending plans on equipment, rose 0.1% in November, instead of gaining 0.2% as reported last month.
Shipments of these so-called core capital goods, which are used to calculate business equipment spending in the gross domestic product report, fell 0.1% as previously reported.
(Reporting by Lucia Mutikani; Editing by Andrea Ricci)