March 8, 2006--As consumers' appetite for overseas goods continues -- along with the trade gap -- factory orders and productivity at home are slipping. Here’s a look at this week's economic developments and how they may impact your business.

Fewer Orders

After rising for three consecutive months, new orders at U.S. factories plunged in January by 4.5% -- the largest drop in six years, the Commerce Department reported Monday.

Led by a 68.3% slide in civilian aircraft and parts orders, factory orders for all manufactured goods fell by $18.9 billion, to $398.2 billion, the department said.

Also down in January were shipments of manufactured durable goods, dropping by $3 billion, or 1.3%, to $219.5 billion, with inventories rising by 0.2%, the report showed.

At the same time, orders and shipments of manufactured nondurable goods rose slightly, the report said.

Productivity Down

With labor costs rising, worker productivity in nonfarm businesses tumbled in the last quarter of 2005 for the first time in nearly five years, revised figures from the Labor Department showed Tuesday.

Following a 4.2% increase over the previous quarter, productivity -- a gauge of employee efficiency measured by the amount of output per hour worked -- fell by 0.5% at the end of last year, the department said. While labor costs gained 3.3%, the report showed, the average number of hours worked per employee rose by 2%.

By contrast, productivity in the manufacturing sector grew by 4.7%, the department said.

Over the entire year, productivity grew by just 2.9%, compared to 3.4% in 2004, the slowest rate since 2001, the department said.

Trade Gap Widens

While factory orders and productivity slipped, U.S. consumers were increasingly turning to overseas goods, the Commerce Department reported Thursday.

Led by imported oil, cars, and consumer goods, imports outpaced exports in January by $68.5 billion, despite record-high exports of $114.4 billion, the department said. That marked the fifth straight month the trade gap has hit historic highs -- by comparison, imports outstripped exports in 1993 by just $70.3 billion over the entire year, the department said.

Help Wanted

Also hitting new highs, the Monster Employment Index jumped six points in February to 157, the second month of gains and the highest since the index was launched in April 2004, the online job board reported Thursday.

The index, which tallies classified job listings on the Internet, showed demand for workers was rising in a range of industries across the country, led by the construction and information technology sectors. After declining for the past four months, demand for managers also picked up in February, Monster said.