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Economy in Brief

U.S. Factory Inventories Rose
by Tom Moeller May 3, 2005

Factory inventories rose 0.6% in March following an upwardly revised like increase in February. Higher oil prices recently have lifted these gains, but not a lot, as petroleum refinery inventories rose 3.2% (22.4% y/y). Less petroleum, inventories rose 0.5% (8.4% y/y).

Accumulation in the primary metals industry has been notable, up 30.3% y/y, and fabricated metal inventories also rose a strong 17.3% y/y. Machinery inventorieshave risen 11.1% this past year and electrical equipment inventories are up 7.9%. Inventories of furniture & related products rose 12.2% y/y while inventories of apparel rose 7.5% y/y.

Factory shipments recovered nearly all of the prior month's drop with a 1.3% gain. Less transportation, shipments rose 1.6% (9.2% y/y) following a deepened 1.2% decline in February.

Orders to the factory sector ticked up 0.1%, restrained by a 2.3% decline in durable goods orders which was revised from the advance report of a 2.8% drop. The decline in orders for non-defense capital goods less aircraft was lessened to 4.0% (+2.7% y/y) from the advance report of a 4.7% shortfall.Nondurable goods orders, which equal shipments, rose 2.8% (10.4% y/y) led by a 19.8% (42.2% y/y) surge in petroleum. Less oil, orders for non-durables fell 0.4% (+5.5% y/y) for the second monthly drop.

Unfilled orders fell 0.3% and lowered the ratio of unfilled orders to shipments for durables slightly.

Do Technological Improvements in the Manufacturing Sector Raise or Lower Employment? from the Federal Reserve Bank of Philadelphia can be found here.

Factory Survey (NAICS) Mar Feb Y/Y 2004 2003 2002
Inventories 0.6% 0.6% 8.9% 7.5% -1.3% -1.8%
New Orders 0.1% -0.5% 4.1% 10.9% 3.7% -1.9%
Shipments 1.3% -1.5% 6.7% 10.5% 2.6% -2.0%
Unfilled Orders -0.3% 0.5% 6.8% 9.1% 4.2% -6.1%
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