–Nov Ex-Transp Orders +2.4%, Still Growing; Nov PCE +0.4%, Q4 Advancing

By Joseph Plocek

WASHINGTON (MNI) – The morning’s data were stronger than on their
face, showing still-rising core orders and advancing consumption.

November durable goods orders fell 1.3% in their second drop, and
now are down in three of the last four months. However, details are less
severe and ex-transportation orders are higher in three of those four
months.

November ex-transportation orders posted +2.4%, after -1.9% in
October. Ex-defense orders fell 2.3%.

Most of the month’s orders weakness was in transportation (-11.9%)
where autos (-2.9%) and civilian aircraft (-53.1%) were sharply lower.
Other components gained: primary metals printed +3.0%, machinery +0.5%,
computers +5.8%, and electronics +5.6%, all showing strength outside
transportation, where the bunching of orders around the timing of air
shows and military contracts causes irregular measures.

Shipments fell 0.3%, and inventories rose 0.6%. Nondefense capital
goods shipments were flat after falling 0.4% in October, suggesting
declining business investment in Q4.

Overall the factory data suggest only a slight slowing in momentum.

In a separate report, November Personal Income was up 0.3%,
Personal Consumption Expenditures up 0.4%, and PCE core prices up 0.1%
for +0.8% over the year. These were about as expected, showing gains
into the Christmas selling season, even as core prices were posting
their slowest pace since 1960.

The overall PCE price index was up 0.1% for +1.0% over the year.
This index bottomed at +0.3% over the year in October 2009.

Real PCE printed +0.3% after +0.5% in October. This shows Q4 is
growing at a strong clip although the exact pace cannot be determined
until Christmas sales are recorded in full. The strength came in the
face of slowing wages.

Private wages advanced just $6.6 billion, down from a $31.2 billion
gain in October. Manufacturing wages fell and services wages slowed.

All other income advanced. Supplements, proprietors’ income, rents,
and personal income receipts rose, with the latter up at more than twice
the October clip. Transfer payments were up $6.9 billion after falling
in October.

The personal savings rate of 5.3% was the smallest since August
2009’s 5.1%, as consumers spent faster than they were taking in income.

**Market News International Washington Bureau: (202)371-2121**

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