U.S. Factory Orders Decline Amid Aviation Weakness

U.S. factory orders dropped 0.4% in November due to lower demand for commercial aircraft. Despite a forecasted recovery with interest rate cuts, weaknesses in business spending on equipment were noted. Mixed signals emerged as certain manufacturing sectors showed resilience, with policy changes potentially impacting future growth.

New data reveals a drop in demand for U.S.-manufactured goods as factory orders declined by 0.4% in November, mainly due to reduced commercial aircraft orders. This setback indicates a potential slowdown in business spending on equipment in the fourth quarter.

Despite this dip, a recent survey from the Institute for Supply Management provided some optimistic signs as the Purchasing Managers Index hit a nine-month high in December. This suggests a rebound in factory production following recent contractions, hinting at a recovery spurred by forthcoming interest rate cuts.

Amid this economic landscape, President-elect Donald Trump's proposed tax reductions could stimulate growth. However, potential tariff hikes could raise raw material costs, adding complexity to the economic outlook. Meanwhile, Wall Street experienced a positive trading session, with the dollar slipping slightly and U.S. Treasury yields rising.

(With inputs from agencies.)