U.S. factory orders fall, inventory liquidation under way
By Lucia Mutikani
WASHINGTON (Reuters) - New orders for U.S. factory goods fell for a second straight month in September as the manufacturing sector continues to struggle under the weight of a strong dollar and deep spending cuts by energy companies.
Motor vehicle production, however, remains a bright spot as orders surged in September. That trend is likely to persist as automakers reported on Tuesday that sales in October were the best in 14 years.
"This morning's report provides little new signal on the state of U.S. manufacturing. Demand for many categories of manufactured goods continues to struggle from the effect of a stronger dollar, weak foreign demand and lower energy prices," said Jesse Hurwitz, an economist at Barclays in New York.
The Commerce Department said new orders for manufactured goods declined 1.0 percent after a downwardly revised 2.1 percent drop in August. Factory orders were previously reported to have declined 1.7 percent in August.
Orders for automobiles and parts rose 1.5 percent in September after falling 2.0 percent in August.
Auto sales jumped 13.6 percent in October from a year ago to an annual rate of 18.24 million units, the highest October level since 2001, according to Autodata Corp. Sales rose to a 18.17 million-unit rate in September.
October's increase suggested that consumer spending remained robust after two straight quarters of strong increases and bolsters expectations of a December interest rate hike from the Federal Reserve.
The dollar firmed against a basket of currencies and stocks on Wall Street rose. U.S. government debt prices fell. Continued...