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Economy in Brief

U.S. New and Unfilled Factory Orders Again Are Strong
by Tom Moeller  August 2, 2013

Orders to all manufacturers increased 1.5% (6.8% y/y) during June, following a 3.0% May jump. A 2.4% rise had been expected. The advance was led by a 3.9% jump (10.8% y/y) in durable goods bookings, little-revised from the advance report of a 4.2% rise. It reflected a one-third m/m jump (124.5% y/y) in orders for commercial aircraft & parts. Nondurable goods orders, which equal shipments, slipped 0.6% (+3.2% y/y) after a 0.8% May increase. Shipments from petroleum refineries slipped 0.7% (+4.9% y/y). Shipments of basic chemicals also slipped 0.8% (+2.7% y/y). The value of apparel shipments fell 1.4% (+3.3% y/y) but shipments of paper products ticked up 0.3% (-1.4% y/y).

The greater strength in new orders versus shipments again generated a rise in unfilled orders. Backlogs rose 2.1% during June and have risen 5.1% during the last twelve months. The rise has been led by a 8.0% y/y increase in transportation equipment, mostly for commercial aircraft. Excluding the transportation sector altogether, unfilled orders rose a slim 0.7% y/y. Backlogs of computers & electronic products jumped 4.4% y/y. Unfilled machinery orders fell 10.1% y/y but electrical equipment backlogs increased 1.4% y/y.

Inventories in the factory sector ticked up 0.1% in June (2.3% y/y) following little change during the prior three months. Apparel inventories rose 1.0% (13.0% y/y) but chemical inventories slipped 0.1% (+4.0% y/y). In the durable goods sector, inventories ticked up 0.1% (2.8% y/y). Transportation sector inventories gained 0.6% m/m (9.3% y/y) reflecting a 15.4% y/y jump in nondefense aircraft & parts. Electrical equipment & appliance inventories rose 1.8% y/y but machinery stockpiles declined 1.0% y/y.

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

Factory Sector- NAICS Classification Jun May Apr Y/Y 2012 2011 2010
New Orders 1.5 3.0 1.3 6.8 2.9 12.9 16.3
Shipments -0.4 1.0 -0.7 3.2 4.0 12.1 11.0
Inventories 0.1 -0.1 0.1 2.3 2.4 10.2 9.8
Unfilled Orders 2.1 1.2 0.3 5.1 3.7 10.0 5.4
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