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Economy in Brief

U.S. Factory Orders Fall Again but Shipments Improve
by Tom Moeller December 5, 2011

Manufacturing orders fell 0.4% during October following a 0.1% September slip, revised from the 0.3% rise reported last month. The latest decline roughly matched Consensus expectations. For durable goods only, orders fell 0.5% and were roughly unchanged from the advance report of a 0.7% decline. Nondurable goods orders, which equal shipments, fell 0.3% (13.2% y/y). The change was held back by a 0.9% decline (+29.5% y/y) in petroleum shipments and a 0.3% slip (+8.7% y/y) in basic chemicals. Offsetting these were a 2.4% rise (15.1% y/y) in apparel shipments and a 0.4% increase (11.4% y/y) in food products.

Unfilled orders rose a lessened 0.2% (7.1% y/y), held back by 0.2% declines in both electrical equipment (+17.0% y/y) and transportation equipment (+3.3% y/y). Machinery backlogs rose 1.3% (29.2% y/y) and primary metals increased 0.9% (11.4% y/y).

Inventories in the factory sector increased a firm 0.9% (11.5% y/y) during October though y/y momentum has slowed. Durable goods inventories rose 0.4% (11.7% y/y). Nondurables inventories jumped 1.7% (11.3% y/y) as oil refineries inventories surged 6.3% (31.1% y/y. Apparel inventories also were strong and jumped 4.1% (20.5% y/y) while basic chemicals rose 0.5% (9.0% y/y).

The factory sector figures are available in Haver's USECON database. The expectation figure is in AS1REPNA.

The Federal Reserve's "Duel Mandate": The Evolution of an Idea from the Federal Reserve Bank of Richmond is available here.

Factory Sector - NAICS Classification (%) Oct Sep Aug Y/Y 2010 2009 2008
Orders -0.4 -0.1 0.1 10.8 12.9 -21.7 0.5
Shipments 0.6 0.3 0.1 11.6 8.6 -18.5 2.3
Inventories 0.9 0.1 0.3 11.5 8.7 -6.8 -2.1
Unfilled Orders 0.2 0.6 0.9 7.1 3.9 -15.2 4.3
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