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Durable Goods Orders Off 1%; Spending Drops

New U.S. orders for long-lasting manufactured goods fell 1 percent in November, a less severe drop than anticipated though it followed a steeply revised plunge in October orders, a government report on Wednesday showed.

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CNBC.com

The Commerce Department now estimates that October orders plummeted by 8.4 percent instead of 6.9 percent it previously reported, for the biggest monthly decline since a 14 percent drop in July 2000.

The fall in November orders was less than the 3 percent decline that analysts surveyed by Reuters had forecast.

Much of November's overall orders drop was concentrated in transportation equipment, where orders fell 7.4 percent after a 12.7 percent October decline. Excluding transportation, orders in November were up 1.2 percent after falling 6.8 percent in October as orders rose in November for computers, machinery and fabricated metal products.

U.S. consumers cut spending for a fifth straight month during November and their incomes shrank, according to a government report on Wednesday that pointed to deepening recessionary pressures.

The Commerce Department said spending contracted by 0.6 percent after falling even more steeply by 1 percent in October. Incomes contracted by 0.2 percent after a slight 0.1 percent gain in October, reflecting the strain that rising unemployment is putting on Americans' ability to spend.

Wall Street economists surveyed by Reuters had expected an even steeper 0.7 percent fall in spending last month but had forecast that incomes would be flat rather than that they would shrink.

Personal savings edged up in November to 2.8 percent of disposable income from 2.4 percent in October, still a low level but a possible sign that the year-old recession is causing wary consumers to put more into bank accounts rather than spending it.