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Economy in Brief

U.S. Factory Orders Jump in December
by Sandy Batten  February 2, 2018

Manufacturers' orders increased 1.7% m/m (8.4% y/y) in December, the same monthly rise as in November (revised up from the initially reported 1.3% m/m increase). This was the sixth increase in factory orders in the past seven months. Durable goods orders jumped up 2.8% m/m (9.6% y/y) vs. 2.9% m/m in the advance report released on January 26 and a 1.7% m/m gain in November. The new information in this report was for nondurable goods. Orders of nondurable goods increased 0.7% m/m (5.5% y/y) in December, a slowdown from a 1.6% m/m jump in November.

The strength in overall factory orders in December was in transportation goods. Those orders were up 7.1% m/m (14.5% y/y) in December following a 4.5% m/m rise in November. As already noted in the advance report for durable goods, the major driving factor was aircraft orders, both defense and nondefense. (Combined aircraft orders were up 24.2% m/m in December on top of a 11.6% m/m gain in November.) Excluding transportation orders, remaining factory orders were up a more modest 0.7% m/m (6.6% y/y) in December following increases in excess of 1% m/m in each of the three preceding months.

Total factory sector shipments rose 0.6% m/m (5.6% y/y) in December 1.2% following an upwardly revised 1.4% m/m increase in November (initially reported as +1.2% m/m). This was the twelfth increase in the past thirteen months. Shipments of durable goods rose 0.5% m/m, down slightly from the 0.6% increase in the advance report. Shipments of nondurable goods increased 0.7% (5.5% y/y) following a 1.6% m/m jump in November. The monthly rise in nondurables shipments was led by apparel (1.6% m/m), beverages and tobacco products (1.6% m/m), and petroleum and coal products (1.4% m/m).

Unfilled orders posted a solid 0.6% m/m (1.9% y/y) rise in December after having edged 0.1% m/m in both October and November. Backlogs of transportation orders rose 0.8% m/m (again led by aircraft) and unfilled orders for primary metals were up 0.9% m/m.

Inventories at the factory level rose 0.5% m/m (4.1% y/y) in December, the same monthly increase as in November. Inventories of durable goods increased 0.3% m/m (4.1% y/y) while inventories of nondurable goods increased 0.7% (4.2% y/y). A 2.4% m/m rise in inventories at petroleum refineries led the rise in nondurables inventories. Inventories of food products rose 0.5% m/m, and apparel inventories jumped 2.1% m/m.

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

Factory Sector (% chg)- NAICS Classification Dec Nov Oct Dec Y/Y 2017 2016 2015
New Orders 1.7 1.7 0.4 8.4 6.0 -1.9 -7.7
Shipments 0.6 1.4 0.8 5.6 5.2 -1.8 -5.8
Unfilled Orders 0.6 0.1 0.1 1.9 1.9 -1.9 -2.0
Inventories 0.5 0.5 0.3 4.1 4.1 0.7 0.0
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