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Economy in Brief

U.S. Factory Inventories Fell A Fifth Month, Shipments Off 15.6% Y/Y
by Tom Moeller March 5, 2009

Factory inventory levels continued to plummet during January. The 0.8% monthly decline was the fifth in a row and lowered inventories by 4.5% from their August peak. To be sure, these figures have been influenced by the decline in oil prices. However, excluding oil, factory inventories are down 1.2% from their peak, a decline not seen since 2003.

Lower inventories of automobiles have dominated the factory inventory decline. They fell 17.6% in January and by 20.0% over the last three months. Steep production cutbacks pulled furniture inventories down 5.2% over the last six months while inventories of electrical equipment are down 7.2% since September.

Weaker factory shipments have prompted the inventory cutbacks with a 15.6% decline over the last year. Again, lower oil prices account for much of the decline but less oil, factory shipments have fallen 13.9% from their peak last July. Automobile shipments were off by more 36.1% from their summer peak while shipments of electrical equipment fell 19.8% during that period. Shipments of furniture & related products fell 16.2% since the summer.

Total factory orders dropped 1.9% during January. The capital goods sector has been notably hard hit. Machinery orders dropped 3.0% in January and by 29.1% during the last six months. Orders for electrical equipment fell 7.3% during January alone and by 19.6% since July.

The Manufacturers' Shipments, Inventories and Orders (MSIO) data is available in Haver's USECON database.

Factory Survey (NAICS, %) January December Y/Y 2008 2007 2006
Inventories -0.8 -1.9 0.0 2.1 3.7 8.2 
   Excluding Transportation -0.8 -2.8 -2.7 -0.6 2.7 7.9
New Orders -1.9 -4.9 -19.2 0.1 1.9 6.2
   Excluding Transportation -0.9 -4.4 -16.6 3.1 1.2 7.4
Shipments -1.7 -3.3 -15.6 1.7 1.2 5.9
   Excluding Transportation -1.6 -3.9 -14.6 3.7 1.5 6.7
Unfilled Orders -1.7 -1.5 1.2 3.5 17.1 15.3
  Excluding Transportation -2.1 -2.5 -3.8 -1.0 8.2 16.0
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