US Factory Orders Plunged Most Since COVID Lockdowns In October

The US Factory Orders experienced significant fluctuations in recent months. Initially, it was anticipated that the chaotic time series would result in a sizable loss of 3.00% month-on-month (MoM) in October. This projection was based on the substantial increase observed in September, followed by a sharp decline in July (along with a noteworthy surge in June).

However, the actual decline in factory orders exceeded expectations, plummeting by 3.6% MoM. This represents the largest drop since the imposition of COVID-19 lockdowns in April 2020. Furthermore, the figures for September were revised downwards, exacerbating the severity of October’s decline, from an initially reported 2.8% MoM to 2.3% MoM.

As a result of the substantial monthly decline and revisions, orders also experienced a 2.1% year-on-year (YoY) drop, marking the most significant decline since September 2020. Additionally, core factory orders, excluding volatile items, experienced a decline of 1.2% MoM, resulting in a 2.2% YoY decrease. This marks the eighth consecutive month of annual declines.

Adding to the negative data, the final Durable Goods Orders data for October confirmed a significant plunge of 5.4% MoM, which aligns with the preliminary figures.

Remarkably, defense spending witnessed a considerable increase of 24.7% MoM, serving as a counterbalance to the decline in non-defense orders, which dropped by 15.8% MoM. This development highlights the influence of the Military-Industrial Complex on the overall outcomes.