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Economy in Brief

U.S. Factory Orders Move Lower as Inventories Rise
by Tom Moeller  March 6, 2014

Orders to all manufacturers fell 0.7% (+2.0% y/y) during January following a 2.0% December decline, revised from -1.5%. Consensus expectations had been for a 0.3% slip. Last month's decline reflected an unrevised 1.0% drop (+4.6% y/y) in durable goods orders, again led lower by aircraft bookings. Orders for nondurable goods (which equal shipments) slipped 0.4% (-0.1% y/y) after a 1.0% December jump. Shipments of textile products were off 11.4% (-3.2% y/y) while shipments of apparel fell 1.0% (-0.1% y/y). Basic chemical shipments also fell 1.0% (-0.5% y/y) but paper product shipments improved 0.4% (0.1% y/y).

Inventories in the factory sector increased 0.2% (2.0% y/y). Transportation equipment inventories rose 0.9% (9.1% y/y) and primary metals inventories gained 0.2% (-2.7 y/y). Computers & electronics inventories slipped 0.5% (+3.0% y/y) while machinery inventories were off 0.3% (-0.2% y/y). Amongst nondurable goods industries, apparel inventories slipped 0.3% (+16.4% y/y) but chemical inventories were roughly unchanged (-0.2% y/y). Petroleum inventories declined 0.4% (-3.0% y/y) while paper product inventories gained 0.3% (-0.2% y/y).

Unfilled orders were unchanged (7.1% y/y) but excluding the transportation sector, backlogs rose 0.3% (5.8% y/y). Backlogs in the machinery sector gained 1.8% (5.9% y/y) and backlogs of electrical equipment increased 0.8% (7.4% y/y). Backlogs of primary metals were off 0.8% +16.3% y/y) while unfilled orders for transportation equipment slipped 0.1% (+7.9% y/y).

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

Factory Sector- NAICS Classification Jan Dec Nov Y/Y 2013 2012 2011
New Orders -0.7 -2.0 1.5 2.0 2.7 2.9 12.9
Shipments -0.3 -0.3 0.8 1.6 2.1 4.0 12.1
Inventories 0.2 0.5 0.1 2.0 2.3 2.4 10.2
Unfilled Orders 0.0 0.2 0.9 7.1 7.0 3.7 10.0
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