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Economy in Brief

U.S. New and Unfilled Factory Orders Continue To Show Strength
by Tom Moeller  January 6, 2014

Orders to all manufacturers matched expectations and jumped 1.8% (4.9% y/y) during November, reaching a new expansion high. The gain was powered by a little-revised 3.4% surge in durable goods orders, led by higher aircraft orders. Orders for nondurable goods (which equal shipments) improved 0.3% (-0.3% y/y) and made up October's dip. Shipments from petroleum refineries jumped 1.4% (-2.9% y/y) but that was offset by a 2.1% decline (+3.4% y/y) in shipments from textile mills. Apparel shipments declined 1.1% (+1.6% y/y), paper products shipments fell 0.9% (-1.9% y/y) and basic chemical shipments slipped 0.1%, unchanged y/y.

The greater strength in new orders versus shipments generated a 1.0% improvement (7.8% y/y) in unfilled orders. The increase was led by a 1.3% rise (8.7% y/y) in transportation equipment, reflecting a 2.3% gain (14.1% y/y) in commercial aircraft. Excluding the transportation sector altogether, unfilled orders rose 0.5% (6.5% y/y). Backlogs of computers & electronic products jumped 1.3% (6.3% y/y) while unfilled machinery orders gained 0.3% (2.1% y/y). Unfilled electrical equipment orders slipped 0.5% (+2.8% y/y).

Inventories in the factory sector remained unchanged (1.8% y/y) for the second consecutive month. Apparel inventories rose 1.1% (12.9% y/y) but chemical inventories ticked 0.1% lower (+2.6% y/y), down for the seventh straight month. In the durable goods sector, inventories gained 0.2% (2.6% y/y). Transportation sector inventories inched 0.4% higher m/m (8.1% y/y) reflecting a 16.3% y/y surge in nondefense aircraft & parts. Computer & electronic products inventories rose 0.8% (1.9% y/y) but electrical equipment & appliance inventories fell 0.9% (+1.7% y/y). Machinery stockpiles slipped 0.3% (+1.4% y/y.

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

Factory Sector- NAICS Classification Nov Oct Sep Y/Y 2012 2011 2010
New Orders 1.8 -0.5 1.8 4.9 2.9 12.9 16.3
Shipments 1.0 0.1 0.1 2.6 4.0 12.1 11.0
Inventories 0.0 0.0 0.3 1.8 2.4 10.2 9.8
Unfilled Orders 1.0 0.6 0.9 7.8 3.7 10.0 5.4
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