This morning the Commerce Department released its October report on Manufacturers' Shipments, Inventories and Orders. New orders for manufactured goods in October decreased $1.0 billion or 0.3% to $305.1 billion. If orders for transportation equipment [which includes the highly volatile aircraft orders segment] were excluded, new orders would have risen $3.6 billion or 1.4% for the month.

For the year to date the annualized growth in new orders for manufactured goods was 2.24%. This compares with an average growth rate of 10.27% from 1993 to 1994, and a 5.86% growth rate the year before. So, new orders for manufactured goods have slowed considerably during 1995.

Today's report revealed that inventories of manufactured goods rose by $1.6 billion or 0.4% during October. This is the twentieth monthly increase in the last twenty-two months. The manufacturers appear to have an ongoing problem of producing more than their markets are demanding.

Rising inventories lead to reduced production, and reduced production leads to layoffs of manufacturing workers. You may recall that last Friday's report by the National Association of Purchasing Management revealed that employment in the manufacturing sector had fallen for nine months in a row.

The rising unemployment situation was emphasized even more by today's report on new claims for state unemployment benefits. New jobless claims jumped by 14,000 for the week ending December 2 -- twice the number expected by the 25 economists participating in this week's Knight-Ridder survey. The total number for the week was 377,000 and the four-week moving average was 372,750. This is 13.3% higher than the average for November a year ago.

We'll get a more comprehensive take on the employment picture tomorrow when the Labor Department releases its report on the national employment situation during the month of November.

Byline: Lafferty (MF Merlin)