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Economy in Brief

U.S. Factory Inventory Decumulation Continues Strong
by Tom Moeller May 1, 2009

During March, the manufacturing sector continued to shed inventories at near a record rate. The 0.8% decline followed a revised 1.3% cutback during February. During the last three months the 12.1% annualized rate of stock-pile decumulation was near the record. The series dates back to 1958. That accelerated rate is in spite of a 1.0% rate of accumulation in petroleum inventories, now that prices have firmed. Excluding oil factory inventories fell at a 12.6% three-month rate that was only slightly exceeded in 2001.

The three-month rates of inventory destocking in several industries have been more than notable. Inventories of electrical equipment & appliances have fallen at a 24.1% rate while textile product inventories were down at a 34.8% clip. Steep production cutbacks pulled furniture inventories down at a 21.8% rate since December while inventories of primary metals fell at a 32.5% pace. Lesser rates of decline were registered in the machinery industry (-12.3%) and by computers & electronic products (-11.9%).

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

Inventory accelerator in general equilibrium from the Federal Reserve Bank of St. Louis is available here.

Factory Survey (NAICS, %) March February Y/Y 2008 2007 2006
Inventories -0.8 -1.3 -3.8 2.1 3.7 8.2 
   Excluding Transportation -0.8 -1.5 -6.4 -0.6 2.7 7.9
New Orders -0.9 0.7 -21.6 0.1 1.9 6.2
   Excluding Transportation -0.9 0.5 -19.0 3.1 1.2 7.4
Shipments -1.2 -0.5 -17.1 1.7 1.2 5.9
   Excluding Transportation -1.5 -0.6 -17.3 3.7 1.5 6.7
Unfilled Orders -1.5 -1.7 -4.8 3.5 17.1 15.3
  Excluding Transportation -1.5 -2.1 -8.7 -1.0 8.2 16.0
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