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Economy in Brief

U.S. Factory Orders Decline While Shipments Stagnate
by Tom Moeller  September 6, 2018

Manufacturers' orders fell 0.8% (+9.0% y/y) during July following a 0.6% June increase, revised from 0.7%. Manufacturing shipments held steady (8.1% y/y) in July after a 1.0% June increase.

Durable goods orders declined 1.7% (+9.4% y/y), which was unrevised from last month's advance report. The decline followed a 0.9% June increase. Orders for transportation equipment fell 5.2% (+12.0% y/y) due to a one-third drop in nondefense aircraft orders, while motor vehicle & parts orders rose 1.3% (7.2% y/y). Total factory orders excluding transportation improved 0.2% (8.4% y/y). Machinery orders increased 0.8% (6.3% y/y) following a 0.3% rise. Orders for computers & electronic products rose 0.9% (8.0% y/y) and electrical equipment bookings eased 0.2% (+9.2% y/y).

Nondurable goods orders, which equal shipments, gained 0.2% (8.6% y/y) after a 0.4% rise. Shipments from petroleum refineries increased 0.4% (33.4% y/y) with higher prices. Food product shipments improved 0.2% (0.7% y/y) after two months of decline. Basic chemical shipments slipped 0.2% (+5.8% y/y) and paper product shipments gained 0.5% (6.3% y/y). Shipments of apparel fell 1.8% (+4.7% y/y).

Shipments of durable goods eased 0.2% (+7.6% y/y) in July after a 1.7% jump. Shipments of transportation products declined 1.7% (+5.5% y/y). Shipments of civilian aircraft backpedaled 25.4% (-26.1% y/y) and automobile shipments fell 2.4% (-9.8% y/y). Shipments outside of the transportation sector increased 0.4% (8.6% y/y) for a second straight month. Machinery shipments improved 0.6% (7.9% y/y). Computer & electronic product shipments jumped 1.4% (7.4% y/y). Electrical equipment & appliance shipments rose 0.5% (6.6% y/y).

Unfilled orders of durable goods held steady (3.9% y/y), following five straight monthly increases. Transportation equipment backlogs eased 0.1% (+3.3% y/y). Excluding the transportation sector, unfilled orders rose 0.3% (5.4% y/y) following three months of strong increase. Machinery backlogs improved 0.4% (2.9% y/y). Unfilled orders of computer & electronic products increased 0.3% (3.6% y/y) and electrical equipment & appliance backlogs rose 0.9% (3.5% y/y), up for the fifth straight month.

Inventories of manufactured products surged 0.8% (5.6% y/y), the strongest increase since December. Durable goods inventories improved 1.3% (5.5% y/y). Transportation product inventories jumped 3.5% (5.3% y/y). Outside of the transportation sector, inventories rose 0.2% (5.7% y/y). Machinery sector inventories declined 0.2% (+4.1% y/y). Computer & electronic product inventories fell 0.5% (+2.4% y/y). Nondurable goods inventories improved 0.2% (5.9% y/y). Basic chemical inventories rose 0.2% (4.1% y/y) but food product inventories decline 0.6% (-0.4% y/y). Petroleum refinery inventories rose 0.9% and by 29.1% y/y with higher prices.

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

Factory Sector (% chg) - NAICS Classification Jul Jun May Jul Y/Y 2017 2016 2015
New Orders -0.8 0.6 0.4 9.0 5.7 -2.9 -8.2
Shipments 0.0 1.0 0.6 8.1 5.0 -3.2 -6.2
Unfilled Orders 0.0 0.4 0.5 3.9 2.0 -1.2 -2.7
Inventories 0.8 0.2 0.2 5.6 4.5 -0.7 -0.8
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