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Economy in Brief
German PPI Accelerates
The German year-on-year PPI has generally been decelerating since early 2017...
U.S. Leading Economic Indicators Signal Continued Expansion
The Conference Board's Composite Index of Leading Economic Indicators increased 0.3% during March...
Philadelphia Fed Factory Conditions Improve; Prices Jump
The Philadelphia Fed reported that its General Factory Sector Business Conditions Index rose to 23.2 during April...
U.S. Initial Claims for Unemployment Insurance Are Little Changed
Initial unemployment insurance claims slipped to 232,000 (-6.1% y/y) during the week ended April 14...
U.K. Retail Sales Fall
U.K. GDP is expected to cool its jets when the first quarter GDP number is released...
by Tom Moeller January 04, 2011
There's a recovery underway in the factory sector, but it's losing steam. Shipments of manufactured goods rose 0.8% in November (5.9% y/y) after a 0.4% October increase, but the magnitude of that recovery is misleading. Higher oil prices account for much of the recent gain. Less petroleum factory shipments rose just 0.3% (5.2% y/y) during November after a 0.7% October decline. For durable goods alone, shipments slipped 0.1% (+4.6% y/y), down for the third month in the last four. Orders for durable goods slipped 0.3% which was an upward revision from the advance report of a 1.3% decline. However, the 10.5% y/y increase is half that earlier in the year.
Factory inventories are growing. During November the 0.8% increase followed a 1.1% gain and the increase brought the inventory level to its highest since February 2009. The inventory/shipments ratio held steady in November at 1.28 but that was up from the January low of 1.24. Inventories at all three stages of fabrication are rising; the increases in materials & supplies, 5.4% y/y, and work-in-process, 8.2% y/y, suggest that factory managers may believe their demand is moving ahead, so they should rebuild stocks. Finished goods inventories rose 6.4% y/y.
The Manufacturers' Shipments, Inventories and Orders (MSIO) data are available in Haver's USECON database.
U.S. Manufacturing Sector (NAICS, %) | Nov | Oct | Sept | Y/Y | 2009 | 2008 | 2007 |
---|---|---|---|---|---|---|---|
Inventories | 0.8 | 1.1 | 1.1 | 6.6 | -8.8 | -0.8 | 7.6 |
New Orders | 0.7 | -0.7 | 3.0 | 8.7 | -17.8 | -1.0 | 8.7 |
Shipments | 0.8 | 0.4 | 0.7 | 5.9 | -15.6 | 2.3 | 6.4 |
Unfilled Orders | 0.6 | 0.7 | 1.3 | 3.1 | -11.1 | 2.8 | 31.2 |