BOUNCE BACK? FACTORY ORDERS FALL MOST SINCE APRIL 2020

New orders for U.S. factory-made goods fell 0.4 percent in January, the largest month-to-month decline since April 2020 at the start of the COVID War, the U.S. commerce department reported.
The consensus among economists was for a 0.2-percent slip, only half the recorded slide.
Meanwhile, the cost of U.S.-made goods climbed 0.5 percent in December, excluding food and energy expenses, the U.S. labor department said. 
The cost for processed materials that factories use, minus the cost of food and energy—which some consider a more accurate measure of producer-price gains—was up 0.7 percent.
Orders for nondurable goods declined by 0.2 percent for the month, while the U.S. Consumer Price Index, including volatile energy and food prices, jumped 0.9 percent.
The measure of core capital goods (CCG) is considered a measure of business investment, because it excludes defense and transportation purchases that are most often made by government agencies. 
The CCG index moved up 0.3 percent in December, less in value than the  0.6-percent price hike in the Producer Price Index, which measures the prices that factories put on their products as they leave the production line.
November’s figure was revised higher, with orders growing by 1.8 percent instead of the 1.6 percent previously reported.
The price of U.S.-produced goods increased 0.9 percent in December, the labor department said.
The value of orders for construction materials gained 1.3 percent in December and 17.2 percent for all of 2021.  The Producer Price Index for the same materials rose by 1.5 percent compared to November and 22 percent year over year.
TREND FORECAST: As we noted in “CONSUMERS SWITCHING SPENDING HABITS: WHAT DOES IT MEAN?” in this issue, it means that people will be buying less hard products which they splurged on for some two years, and will instead put their money into services, thus lowering the need for factory made goods. 
In addition, inflation is eating away and their disposable income levels, while American manufactured products continue to lose market share to overseas competitors.