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Economy in Brief

U.S. Factory Orders Backpedal; Shipments Rise
by Tom Moeller  September 5, 2017

Manufacturing sector orders declined 3.3% during July (+5.4% y/y) following a 3.2% June gain, revised from 3.0%. Durable goods orders reversed June's increase with a 6.8% drop (+4.4% y/y). Transportation sector orders were off 19.2% (-1.1% y/y) due to lower commercial aircraft bookings. Durable goods orders outside of the transportation sector improved 0.5% (6.5% y/y). Computer & electronic product orders increased 2.1% (5.0% y/y). Machinery orders eased 0.9% (+9.2% y/y), while electrical equipment orders rose 2.6% (-3.4% y/y).

Total factory sector shipments gained 0.3% (5.3% y/y), but have been little changed in the first seven months this year. Durable goods shipments rose 0.2% (4.2% y/y). Transportation equipment shipments notched 0.2% higher (0.6% y/y). Auto shipments declined 1.7% (-16.1% y/y) while light truck shipments were off 3.4% (+1.3% y/y). Just civilian aircraft shipments strengthened 7.9% (0.9% y/y). Excluding the transportation sector, shipments rose 0.4% (6.1% y/y). Shipments of machinery improved 0.2% in July (8.2% y/y) while computer & electronic product shipments gained 1.0% (3.6% y/y).

Nondurable goods shipments (which equal orders) rose 0.4% (6.3% y/y). The value of petroleum refinery shipments gained 2.2% (20.7% y/y). Basic chemical shipments rose 0.2% (3.3% y/y), and textile product shipments rose 0.4% (3.3% y/y). Shipments of apparel fell 0.8% (+4.3% y/y) while food product shipments inched 0.2% higher (7.3% y/y).

Unfilled orders eased 0.3% (+0.7% y/y) with the decline in aircraft backlogs. Outside of the transportation sector, unfilled orders rose 0.3% (3.8% y/y). Electrical equipment & appliance backlogs fell 0.5% (+7.7% y/y). Computer & electronic product backlogs held steady (2.6% y/y). Unfilled orders for machinery increased 0.4% (3.6% y/y).

Inventories at the factory level rose 0.2% (2.5% y/y) in July. Outside of the transportation sector, inventories also rose 0.2% (3.5% y/y). Durable goods inventories gained 0.3% (2.3% y/y). Fabricated metals inventories jumped 0.8% (4.0% y/y). Machinery inventories held steady (4.7% y/y) while inventories of computers & electronic products rose 0.1% (2.4% y/y). Nondurable goods inventories improved 0.1% (2.7% y/y), but apparel inventories fell 1.4% (-10.5% y/y). The value of petroleum refinery inventories increased 0.9% (15.1% y/y), the first rise in five months.

The factory sector figures are available in Haver's USECON database.

Factory Sector- NAICS Classification (%) Jul Jun May Jul Y/Y 2016 2015 2014
New Orders -3.3 3.2 -0.3 5.4 -1.9 -7.7 1.8
Shipments 0.3 0.1 0.3 5.3 -1.8 -5.8 1.3
Unfilled Orders -0.3 1.3 -0.1 0.7 -1.9 -2.0 8.4
Inventories 0.2 0.3 -0.2 2.5 0.7 0.0 1.7
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