Biggest drop in factory orders, shipments in more than a year

posted at 11:35 am on March 5, 2012 by Ed Morrissey

So much for a fast start to the recover in 2012.  A week after announcing the worst durable-goods orders report in three years, the Commerce Department’s report on factory orders and shipments in January show the worst outcome in sixteen months:

New orders for manufactured goods in January, down following two consecutive monthly increases, decreased $4.8 billion or 1.0 percent to $462.6 billion, the U.S. Census Bureau reported today.  This followed a 1.4 percent December increase.  Excluding transportation, new orders decreased 0.3 percent.  Shipments, up eight consecutive months, increased $4.1 billion or 0.9 percent to $463.6 billion.  This followed a 0.8 percent December increase.  Unfilled orders, up twenty-one of the last twenty-two months, increased $5.4 billion or 0.6 percent to $917.9 billion.  This followed a 1.5 percent December increase.  The unfilled orders-to-shipments ratio was 6.10, up from 6.04 in December.  Inventories, up twenty-seven of the last twenty-eight months, increased $3.9 billion or 0.6 percent to $614.7 billion.  This was at the highest level since the series was first published on a NAICS basis in 1992 and followed a 0.2 percent December increase.  The inventories-to-shipments ratio was 1.33, unchanged from December.

Inventories, on the other hand, continued to increase — a bad sign as demand drops:

Inventories of manufactured durable goods in January, up twenty-five consecutive months, increased $2.4 billion or 0.6 percent to $372.5 billion, revised from the previously published 0.7 percent increase.  This was at the highest level since the series was first published on a NAICS basis and followed a 0.3 percent December increase.  Machinery, up twenty-two consecutive months, had the largest increase, $0.9 billion or 1.5 percent to $61.5 billion.  Inventories of manufactured nondurable goods, up four of the last five months, increased $1.5 billion or 0.6 percent to $242.2 billion.  This followed a slight December decrease.

Reuters actually nails the problem in its analysis:

New orders for factory goods dropped in January by the most in over a year and businesses cut orders for new capital goods, suggesting one of the drivers of the economic recovery faltered at the start of the year.

The Commerce Department said on Monday orders formanufactured goods fell 1.0 percent, a less steep decline than the 1.5 percent loss expected by private forecasters in a Reuters poll. Still, it was the biggest decline since October 2010.

Many economists think the expiration of some tax breaks on capital spending at the end of 2011 led businesses to bring forward investments.

The problem is that the gimmicky tax break in 2011 for capital investments — pushed by the Obama administration and many Republicans as well — didn’t address the key issues in the stagnation since the June 2009 end of the Great Recession.  Like so many other temporary tax changes, the one-year tax break on capital purchases only accelerated capital purchases that would have taken place anyway. This tax break was a larger-scale version of Cash for Clunkers, and it had the same effect, which was to steal demand from future quarters, and that’s exactly what we have seen from both January reports.

Thanks to the ambiguity of tax policy, energy prices, and regulation in the marketplace, perhaps especially the ambiguity in regulations like Dodd-Frank and ObamaCare, capital investors can’t price long-term risk at all.  That means that they can’t make informed decisions on capital investment for business expansions and new-business creation, and so their capital stays on the sidelines.  Until we quit tinkering with gimmicky, temporary tax breaks and reform the long-term tax codes, we’re not going to see robust and sustained economic growth.


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The economy is recovering!

justltl on March 5, 2012 at 11:35 AM

More of the Downgraded economy.

Chip on March 5, 2012 at 11:35 AM

But contraceptives!

/Marxist misdirection.

rbj on March 5, 2012 at 11:36 AM

The screw just keeps turning…

NotCoach on March 5, 2012 at 11:37 AM

The good news is that the Obama “administration” is leading the world in manufacturing excuses for his crappy peformance as POTUS.

NoDonkey on March 5, 2012 at 11:38 AM

Recovery? We don need no stinkin’ recovery.

Just have to force most of the population into lifetime dependency on gubmint….and we can easily elect Democrats for the next couple generations.

coldwarrior on March 5, 2012 at 11:39 AM

All part of his evil plan.

Meanwhile, “Hold the Kobe beef plater while I drive the green. Fore.”

NaCly dog on March 5, 2012 at 11:40 AM

The expectation was for a 1.5% drop, so the news was better than expected. We were also happy to see ISM Service Sector index rise to 57.3% (the expectation was for a drop), so in general the economic news was not as bad as expected today. Markets are reacting to China announcement of growth slowdown. We will be looking forward to the employment report on Friday; expectation is for another +200K report.

TouchdownBuddha on March 5, 2012 at 11:40 AM

WSJ has Obama at 50% approval

liberal4life on March 5, 2012 at 11:41 AM

http://hotair.com/archives/2012/03/05/the-useless-nbcwsj-poll/

NotCoach on March 5, 2012 at 11:41 AM

I’m sure the stock market will go up a100 points today….

vietvet68 on March 5, 2012 at 11:41 AM

WSJ has Obama at 50% approval

liberal4life on March 5, 2012 at 11:41 AM

WSJ has Obama at 50% approval

liberal4life on March 5, 2012 at 11:41 AM

So half the country approves of our half-white, half-wit of a half-baked president?

NoDonkey on March 5, 2012 at 11:41 AM

The recession was officially over June 2009.

So anything that Ed posts must be a lie.
/

Electrongod on March 5, 2012 at 11:41 AM

WSJ has Obama at 50% approval

liberal4life on March 5, 2012 at 11:41 AM

Cool.

Did you hear that Bush is still screwing around with the economy again?

Electrongod on March 5, 2012 at 11:41 AM

So much for a fast start to the recover in 2012. A week after announcing the worst durable-goods orders report in three years, the Commerce Department’s report on factory orders and shipments in January show the worst outcome in sixteen months.

I think I’ve figure out the reason the socialists in the national government and the media were pushing this recovery story so early in the year – and way to early to help out El Presidente Downgrade.

It wasn’t meant to help him out directly per say, rather it was meant to help out Romney in that a supposedly recovering economy would make it more difficult for a More Conservative candidate to win, and therefore make Romney the ‘safe’ choice .

Does that sound like a valid theory?

Besides they figure people will have forgotten this false recovery start next fall and play the same game over again.

Chip on March 5, 2012 at 11:44 AM

So one would have to assume that factory orders numbers in Q4-2011 were inflated due to people placing orders ahead of the expiration of the tax break. In other words, any crowing about increases in previous factory order increases is bogus and were generated by tax law manipulation.

crosspatch on March 5, 2012 at 11:44 AM

The uncertainty that pervades our society seems to be an Obama feature, not a bug. Families, too, have no ability to reason their way through economic decisions. Could it be that Obama wants multitudes to give up and simply do whatever he says?

GaltBlvnAtty on March 5, 2012 at 11:45 AM

Until we quit tinkering with gimmicky, temporary tax breaks and reform the long-term tax codes, we’re not going to see robust and sustained economic growth.

Nothing says Monday better than that picture of Obama and a giant screw.

As to legitimate tax reform, in an election year? It’s what is needed but it is not what we are going to see. Whenever there is good economic news, Obama rushes out to the press corps and pats himself on the back and tells us what a damned good job he is doing in economic recovery. I guess Jay Carney is going to be on the defensive about durable goods as he lies about just how insignificant this drop is in the grand scheme of things.

In the meantime, GM just laid off 1300 people because nobody is buying their crappy unsafe Volts.

Happy Nomad on March 5, 2012 at 11:45 AM

Listen up Hot Air, I am sick of being a time traveling neutron. It is not in my nature.

NotCoach on March 5, 2012 at 11:46 AM

Dear leader will continue to double down

He’s smarter than any of us, doncha know
/

cmsinaz on March 5, 2012 at 11:46 AM

economy? who cares about the economy! they is a major slut spill going on!
http://www.youtube.com/watch?v=iMucmRlPZK0

nathor on March 5, 2012 at 11:46 AM

Republicans hate women and are racists.

Focus y’all.

/

CorporatePiggy on March 5, 2012 at 11:47 AM

Inventories, up twenty-seven of the last twenty-eight months, increased $3.9 billion or 0.6 percent to $614.7 billion. This was at the highest level since the series was first published on a NAICS basis in 1992

Oof.

Looks like Government Electric is going to have to order alot more Volts from Government Motors.

In the meantime, the official unemployment rate will go down again.

forest on March 5, 2012 at 11:47 AM

Yeah but condom sales are about to go through the roof, and not just for that Georgetown chick who likes any guy with a pulse.

Bishop on March 5, 2012 at 11:47 AM

Cool.

Did you hear that Bush is still screwing around with the economy again?

Electrongod on March 5, 2012 at 11:41 AM

Bush is also still screwing up Iran.

NotCoach on March 5, 2012 at 11:47 AM

The good news is that the Obama “administration” is leading the world in manufacturing excuses for his crappy peformance as POTUS.

NoDonkey on March 5, 2012 at 11:38 AM

Now if we could only find a way to harness all that manure into some sort of useable alternative energy.

Happy Nomad on March 5, 2012 at 11:48 AM

How is our inventory of Georgetown Law students???

ted c on March 5, 2012 at 11:50 AM

The recession was officially over June 2009.

So anything that Ed posts must be a lie.
/

Electrongod on March 5, 2012 at 11:41 AM

Lol, Zero must have hired folks from the CRU to make that happen. Its total horse manure. Manufactured GDP numbers don’t make reality.

The good news is that the Obama “administration” is leading the world in manufacturing excuses for his crappy peformance as POTUS.

NoDonkey on March 5, 2012 at 11:38 AM

I would like to nominate this as the thread winner!

dogsoldier on March 5, 2012 at 11:50 AM

If we are survive as a nation, obama must go.

Pork-Chop on March 5, 2012 at 11:52 AM

Congratulation on the good news, patriots! You guys had a tough week! This must really lift your spirits! Remember, if it hurts America, it helps REAL America!

KeninCT on March 5, 2012 at 11:53 AM

Ed:

“Until we quit tinkering with gimmicky, temporary tax breaks and reform the long-term tax codes, we’re not going to see robust and sustained economic growth.”

Exactly. And the fact that these tinkerings continue remains proof that Obama and his Administration have every intention to continue punishing certain capital, select American business, and “1%-ers.”

He has to for he’s a Socialist/Fascist. This dog ain’t changing its spots.

AnonymousDrivel on March 5, 2012 at 11:53 AM

Bet we’ll be seeing another of those “unexpected” headlines about this from Bloomberg propaganda soon.

Hey VEGASRICK, if you see this, please respond! I wanna meetcha & treatcha to a coffee! I live near Rainbow and Alta! I you can meet, please suggest a nearby place in the next hour or so local time!

GuitarMark on March 5, 2012 at 11:54 AM

The recession was officially over June 2009.

So anything that Ed posts must be a lie.
/

Electrongod on March 5, 2012 at 11:41 AM

Can’t wait for the media spin that this is really a good thing.

swinia sutki on March 5, 2012 at 11:55 AM

Bishop on March 5, 2012 at 11:47 AM

Wait, aren’t those made using petrochemicals?

The very same petrochemicals that President Downgrade wants go higher in price?

Higher prices for oil will result in higher prices for condoms.

So why does Downgrade hate women so much and want to deprive them of birth control?

Chip on March 5, 2012 at 11:55 AM

I’m sure that this Recovery Summer will get it done…../

ted c on March 5, 2012 at 11:55 AM

I’m sure that this Recovery Summer will get it done…../

ted c on March 5, 2012 at 11:55 AM

Bullwinkle, that trick never works.

swinia sutki on March 5, 2012 at 11:56 AM

I’m starting to think “Great Recession” is a bit of an overstatement. Maybe what we’re experiencing is just a “Chronic Recovery.”

BKeyser on March 5, 2012 at 11:56 AM

KeninCT on March 5, 2012 at 11:53 AM

You don’t get it.

Your dear Comrade, El Presidente Downgrade wants to hurt America – Downgrade it you might say.

Be honest with us: Do you want this Downgrading of the country to continue?

Chip on March 5, 2012 at 11:56 AM

OMG Rush Limbaugh to the eleventieth power!!1!!

MNHawk on March 5, 2012 at 11:57 AM

The economy is improving, Comrades!!!

faraway on March 5, 2012 at 11:58 AM

Chip on March 5, 2012 at 11:55 AM

You have to think in Russian Liberal.

The new condom mandate will require them to be made of human skin. And where will the human skin come from, well let’s just say that under ObamaCare the categories of those who will be denied service are going to be looooooong.

See, no nasty petroleum products AND excess population is gotten rid of which will lower healthcare costs.

Bishop on March 5, 2012 at 11:59 AM

Swinia, they are awaiting Valeries email

cmsinaz on March 5, 2012 at 12:00 PM

KeninCT on March 5, 2012 at 11:53 AM

Any hits on the date-link this weekend or was it another bust for you?

Bishop on March 5, 2012 at 12:01 PM

The good news is Obama clinched his fist once when addressing Iran…
Then promptly placed his hands back in his pants pocket..

I shuddered..

Electrongod on March 5, 2012 at 12:03 PM

I hope there’s enough gas around to make it to my polling place when November rolls around.

If not I’m still willing to crawl over broken glass to get there and pull the R lever.

fogw on March 5, 2012 at 12:04 PM

Unexpected…

Drained Brain on March 5, 2012 at 12:06 PM

Chip on March 5, 2012 at 11:55 AM

You have to think in Russian Liberal.

The new condom mandate will require them to be made of human skin. And where will the human skin come from, well let’s just say that under ObamaCare the categories of those who will be denied service are going to be looooooong.

See, no nasty petroleum products AND excess population is gotten rid of which will lower healthcare costs.

Bishop on March 5, 2012 at 11:59 AM

Well, they can’t make condoms out of Algae can they?

Chip on March 5, 2012 at 12:06 PM

All part of his evil plan.

Meanwhile, “Hold the Kobe beef plater while I drive the green. Fore.”

NaCly dog on March 5, 2012 at 11:40 AM

…as he stands in front of the new White House kitchen conveyor system that will finally be able to move enough live lobster into the kitchen to satisfy Moochie…

slickwillie2001 on March 5, 2012 at 12:06 PM

Former Agent: New Bill Effectively Outlaws Protests Anywhere Secret Service Deems Off Limits.

Could protestors unknowingly run afoul of the Feds and face prison for exercising their First Amendment rights?

Yes, according to some analysts, and all that‘s needed is President Obama’s signature for a new law to give the Secret Service powers more befitting the Praetorian Guard.

Even former 15-year Secret Service veteran Dan Bongino has raised alarms, as he told the Blaze that House Resolution 347 creates an America in which ”you could accidentally be in a cordoned off secret service controlled area and find yourself in jail.”

“This was done to send a message to both sides,” Bongino said, “Occupy Wall Street and the Tea Party” could be affected by this. “It’s a very serious issue.”

http://www.theblaze.com/stories/former-agent-new-bill-effectively-outlaws-protests-anywhere-secret-service-deems-off-limits/

Zcat on March 5, 2012 at 12:08 PM

I hope there’s enough gas around to make it to my polling place when November rolls around.

If not I’m still willing to crawl over broken glass to get there and pull the R lever.

fogw on March 5, 2012 at 12:04 PM

Crawling over broken glass sounds safer than driving a Chevy Volt, but don’t give the White House brain trust any more ideas.

NoDonkey on March 5, 2012 at 12:08 PM

The President needs the economy to improve and therefore it will improve. If it doesn’t all the Kulaks will be shot or sent to Siberia, as per standard procedure, so start working!

MTF on March 5, 2012 at 12:09 PM

El rushbo on

Stooped to the libs level

cmsinaz on March 5, 2012 at 12:09 PM

The Biggest failure of an administration since Jimmy Carter.

kirkill on March 5, 2012 at 12:10 PM

But…..but…..AP says things are GREAT! Not to worry about high gasoline prices. That’s only a threat to recovery IF the price goes above (pull a number out of thin air) $4.11/gallon.

Well locally it’s now $4.50/gallon. Unleaded.

But again, not to worry, Happy Days Are Here Again!

GarandFan on March 5, 2012 at 12:10 PM

One industry is doing very well indeed.

Guns.

Rebar on March 5, 2012 at 12:10 PM

Stooped to the libs level

cmsinaz on March 5, 2012 at 12:09 PM

Perfect come back….true too…

Electrongod on March 5, 2012 at 12:10 PM

KeninCT on March 5, 2012 at 11:53 AM

Any hits on the date-link this weekend or was it another bust for you?

Bishop on March 5, 2012 at 12:01 PM

What dates, bro? He’s as gay as a sunny morning. The profile is a cover.

http://boards.cruisecritic.com/search.php?searchid=29075877

Archivarix on March 5, 2012 at 12:12 PM

El rushbo on

Stooped to the libs level

cmsinaz on March 5, 2012 at 12:09 PM

Yeah but I disagree with him on one point. Sandra Fluke is indeed a slut who is demanding those Jesuits be forced to pay for her having sex and, beyond that, she wants to make the Feds force them to like doing so. Slut is about the nicest thing I can say about this woman so ugly (inside and out) it is perfectly believable that she is indeed doing it for other women and not herself.

Bottom line it is unconstititional and immoral to force religious institutions to pay for Ms. Flukes contraception. To the extent that Nancy Pelosi has used this stooge to make a wedge issue and distraction, Ms. Fluke is indeed a slut and a prostitute.

Happy Nomad on March 5, 2012 at 12:15 PM

Vote for me. I’ll keep those filthy teabaggers away from your bagina

Wigglesworth on March 5, 2012 at 12:25 PM

What dates, bro? He’s as gay as a sunny morning. The profile is a cover.

Archivarix on March 5, 2012 at 12:12 PM

Heh. Explains why he’s 8205th out of 7963rd.
But to be honest, I had a feeling he was queer right off the bat. He writes like one.

Lanceman on March 5, 2012 at 12:26 PM

Congratulation on the good news, patriots! You guys had a tough week! This must really liftyour spirits! Remember, if it hurts America, it helps REAL America!

KeninCT on March 5, 2012 at 11:53 AM

It’s a completely predictable outcome. You can expect more of the same throughout the year, and much worse if Obama gets a 2nd term.

spinach.chin on March 5, 2012 at 12:26 PM

To the extent that Nancy Pelosi has used this stooge to make a wedge issue and distraction, Ms. Fluke is indeed a slut and a prostitute.

Happy Nomad on March 5, 2012 at 12:15 PM

The Democrats are too stupid to think of an issue this distracting from the economy on their own, they must be thanking Gaia for this ridiculously idiotic unforced error.

Every moment talking about some dingbat’s bedroom antics is one less minute talking about the economy.

NoDonkey on March 5, 2012 at 12:27 PM

Thanks to the ambiguity of tax policy, energy prices, and regulation in the marketplace, perhaps especially the ambiguity in regulations like Dodd-Frank and ObamaCare, capital investors can’t price long-term risk at all. That means that they can’t make informed decisions on capital investment for business expansions and new-business creation, and so their capital stays on the sidelines. Until we quit tinkering with gimmicky, temporary tax breaks and reform the long-term tax codes, we’re not going to see robust and sustained economic growth.

Almost every other industrialized country is moving “right” (in the American sense) towards sound economic policy except for the United States, which has moved Left thanks to Democrats and Liberal Republicans.

Thank goodness we have federalism or else the outlook would be even more grim. US companies can at least stop expanding in Progressive states and open up shop in work-friendly states. Reason #1423534 why the Left rejects federalism.

visions on March 5, 2012 at 12:28 PM

If we are survive as a nation, obama must go.

Pork-Chop on March 5, 2012 at 11:52 AM

Right on! That’s why I’m stocking up on guns, ammo, survival seeds for my crisis garden, and gold from Goldline.
Although, I still have plenty left over from the last election so…..what to do?
Where’s that Beck guy when you need him?

greataunty on March 5, 2012 at 12:45 PM

Archivarix on March 5, 2012 at 12:12 PM

O_O

What the…

HAHAHAHAHAHAHAHAHA

Bishop on March 5, 2012 at 1:05 PM

WSJ has Obama at 50% approval

liberal4life on March 5, 2012 at 11:41 AM

Don’t forget the fact this was a general sample vs. likely voters… also, the warped D/R/I sample is a good laugh, too!

Turtle317 on March 5, 2012 at 1:15 PM

The economy is recovering!

justltl on March 5, 2012 at 11:35 AM

The recovery is economizing!

tomg51 on March 5, 2012 at 1:27 PM

Did you guys hear Rush called someone a slut?!?

O. M. G.!

Look! Over there! Something shiny!!

KMC1 on March 5, 2012 at 1:42 PM

WSJ has Obama at 50% approval

liberal4life on March 5, 2012 at 11:41 AM

The poll sampled adults, not likely voters, and had a 27% sample of Republicans. The poll is basically crap.

hachiban on March 5, 2012 at 1:45 PM

At least our chocolate ration got increased. Thank you Presidebt 0bama!

jukin3 on March 5, 2012 at 1:46 PM

Hey does Gallup have Obama approval at 44 percent?and unemployment going up to 8.8 percent?

Conservative4ev on March 5, 2012 at 2:04 PM

KeninCT on March 5, 2012 at 11:53 AM
Any hits on the date-link this weekend or was it another bust for you?

Bishop on March 5, 2012 at 12:01 PM

I think he’s looking for the phone # for that Georgetown chick…she looks similar to his blow-up companion.

KOOLAID2 on March 5, 2012 at 2:28 PM

This administration is addicted to short term gimmicks because they are short term. Once they run out the tax base raises back to normal without doing anything in particular and the administration is then free to increase it even further from a higher starting point. Obama’s goal is long term high taxes, which generate plenty of goodies to be given out to the faithful. This can’t be done anywhere near as easily from a low tax base. Gimmicks are simply a short term defensive play needed to get us to that great upland of permanently higher taxes and unlimited government goodies.

Fred 2 on March 5, 2012 at 2:38 PM

Roaring back?

ouldbollix on March 5, 2012 at 3:46 PM

Congratulation on the good news, patriots! You guys had a tough week! This must really lift your spirits! Remember, if it hurts America, it helps REAL America!

KeninCT on March 5, 2012 at 11:53 AM

Fantastic. I just new it would be in here somewhere. The old man with the white beard promised me.

WryTrvllr on March 5, 2012 at 5:07 PM

You know, after you’ve typed in 1000 times or so, something should click….

WryTrvllr on March 5, 2012 at 5:15 PM

I was expecting liberal4life to put a comment saying anyone who is hoping for a bad economy in Nov will be dosappointed on here. I guess he can’t handle the truth as he whistles past the graveyard

Gallup had the unemployment rate going up to 8.8 percent. Of course the Goebbles media will report the opposite such as, the fuher was going to push back the Russians out of Berlin :)

Conservative4ev on March 5, 2012 at 5:40 PM

You can manufacture anything you want…. but if you can’t sell it it is worth nothing. Just look at what America is selling “Our Freedom”

When the Government is the only purchaser and even it does not have the money that dear friends is a crash and burn.

ActinUpinTexas on March 6, 2012 at 11:43 AM