·
Factory inventories surged 1.0% during June, thanks to the surge in oil
prices. The value of inventories at petroleum refineries rose 9.5%
(37.2% y/y) in June and the value is up by more than one-half since
December as prices have surged. Less petroleum, factory inventories rose
0.4% (5.1% y/y) in June and YTD they rose 4.6%.
· Less oil, the rate of inventory slowed. Automobile inventories fell at a 31.7% annual rate during the last three months. Inventory accumulation in the machinery sector also dropped to a 1.8% growth rate. Accumulation in the computer & electronics areas fell as well to a 1.0% rate of growth.
· Factory shipments also surged,
by 1.6%, due to oil. Shipments of petroleum surged by 5.6% (52.5% y/y).
Less petroleum shipments rose (2.2% y/y) after a 0.5% May decline.
· Total factory orders jumped by 1.7%, which was double expectations, again reflecting stronger petroleum orders (which equal shipments). Less petroleum, shipments did surge 1.0% (1.8% y/y) though the gain was making up for weakness earlier this year. Durable orders rose 0.8% which was the same as reported in the advance report, after a 0.1% May uptick.
· Overall unfilled orders rose 0.9%, the same as they did in May. Order backlogs for civilian aircraft, which have been rising at a 25.3% rate, have started to cool. They were up just 0.4% in June Excluding the transportation sector altogether unfilled orders still rose 1.2% in June and at a 12.8% rate during the last three months. Accelerated growth in backlogs of machinery still account for much of that strength.