US factory orders rise

New orders at US factories posted a surprisingly strong 0.5 percent rise in October, helped by demand for defence and transportation equipment, Commerce Department report showed on Wednesday. Wall Street economists surveyed by Reuters had forecast that October orders would be flat.
Instead, not only were they up but the government said that September orders increased by a slightly stronger 0.3 percent rather than the 0.2 percent gain it estimated a month ago. The October orders rise was the strongest since a 3.4 percent jump in July.
Excluding transportation, factory orders rose 0.6 percent in October. When defence orders were stripped out, factory orders were up 0.3 percent. Non-defence capital goods order excluding aircraft, a proxy for business spending, fell a revised 2 percent in October after rising 1.4 in September. Last week, the government had said in a report on durable goods orders that non-defence capital goods orders excluding transportation had fallen more steeply by 2.3 percent in October.
Orders for transportation goods were up 0.5 percent in October, although that followed a 6.9 percent plunge in September. Defence capital goods orders climbed strongly by 16 percent, partly reversing September's 26.8 percent drop.
NON-FARM PRODUCTIVITY JUMPS:
US worker productivity in the third quarter notched the strongest growth in four years on a cut-back in hours that curbed labour costs, revised government data showed on Wednesday. US non-farm productivity, or hourly output per worker, rose at a 6.3 percent annualised pace in the third quarter, in news that will help the Federal Reserve set lingering inflation-concerns aside.
It was the largest increase in productivity since the third quarter of 2003, when it increased at 10.4 percent rate, according to the Labour Department Report. Economists polled by Reuters expected non-farm worker productivity to be revised up 5.7 percent, compared with the 4.9 percent annualised pace initially recorded.
Unit labour costs, a gauge of inflation and profit pressures under close scrutiny by the Fed, was revised to show a 2.0 percent drop in the third quarter for the largest decline in four years. These had been forecast to decline by 1.0 percent, from an initially reported 0.2 percent fall.
Year-on-year, productivity grew 2.7 percent in the third quarter, up from 2.4 percent preliminarily reported, the Labour Department data showed. This helped subdue yearly unit labour cost growth to 3.0 percent, versus the 4.3 percent gain that was initially thought.