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Economy in Brief
U.S. Mortgage Applications Continued to Rise, but only Slightly
The Mortgage Bankers Association reported that mortgage applications edged up 0.7% w/w...
Globally Money Supply Slows or Contracts in Real Terms
Money supply trends show that slowing is widespread across the major monetary center countries...
U.S. Consumer Confidence Deteriorates Further in June
The Conference Board's Consumer Confidence Index weakened 4.4% (-23.4% y/y) in June...
U.S. FHFA House Prices Continued to Rise in April
The FHFA House Price Index increased 1.6% during April...
U.S. Advance Trade Deficit Narrowed Slightly in May
The advance estimate of the U.S. international trade deficit in goods narrowed to $104.3 billion in May...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Gerald D. Cohen October 4, 2018
Manufacturers' orders jumped 2.3% (10.0% year-on-year) in August, following an upwardly revised 0.5% decline in July. Manufacturing shipments rose 0.5% (7.8% y/y), the 14 consecutive monthly increase.
Orders in the volatile durable goods sector surged 4.4% (11.8% y/y) after a 1.2% decline in July. Orders for transportation equipment soared 13.1% (20.7% y/y) due to a 69.1% takeoff in volatile civilian aircraft bookings (20.6% y/y). Total factory orders excluding transportation edged up 0.1% (7.8% y/y). Machinery orders declined 0.8% (+5.7% y/y) after a 0.4% increase. Orders for computers & electronic products decreased 0.3% (+6.9% y/y).
Shipments of durable goods grew 0.7% (7.5% y/y) in August. Shipments of transportation equipment increased 2.0% (8.0% y/y) reflecting an 18.2% jump in civilian aircraft & parts (0.6% y/y). Machinery shipments declined 0.6% (+5.9% y/y) reversing July's gain. Computer & electronic product shipments edged up 0.1% (6.5% y/y).
Nondurable goods shipments, which equal nondurable goods orders because nondurables are shipped in the same period they are ordered, rose 0.2% (8.1% y/y). While the largest nondurable category, food products, was flat (0.8% y/y), basic chemicals, the second largest, rose 0.4% (5.9% y/y). Shipments of petroleum & coal shipments edged down 0.1% (+27.5% y/y). Energy prices, in particular oil prices, have a significant role on the value of energy product activity in this report. West Texas intermediate oil prices were up 41.5% in the year ending August.
Unfilled orders of durable goods, which as implied above equals unfilled factory orders, increased 0.9% (4.9% y/y). Transportation equipment backlogs rose 1.2% (4.7% y/y). Excluding the transportation sector, unfilled orders gained 0.3% (5.4% y/y). Non-transportation unfilled orders have been on a steady rise since early 2017. Machinery backlogs edged up 0.1% (2.7% y/y), while the computer & electronic sector increased 0.2% (3.6% y/y).
Inventories of manufactured products edged down 0.1% (+5.1% y/y) as durable goods inventories--which are roughly 60% of total inventories--declined 0.3% (+4.7% y/y). Transportation fell 1.4% (+3.4% y/y). Inventories outside of transportation grew 0.2% (5.5% y/y). The machinery sector rose 0.5% (4.6% y/y). Computer & electronic product inventories declined 0.4% (+1.8% y/y). Nondurable goods inventories increased 0.3% (5.7% y/y). Basic chemical inventories, which have the largest nondurable inventories, rose 0.3% (4.6% y/y). Meanwhile, food product inventories, the second largest category, declined 0.2% (-0.4% y/y). Petroleum refinery inventories improved 1.1% (23.5% y/y).
All these factory sector figures and West Texas intermediate oil prices are available in Haver's USECON database.
Factory Sector (% chg) - NAICS Classification | Aug | Jul | Jun | Aug Y/Y | 2017 | 2016 | 2015 |
---|---|---|---|---|---|---|---|
New Orders | 2.3 | -0.5 | 0.6 | 10.0 | 5.7 | -2.9 | -8.2 |
Shipments | 0.5 | 0.0 | 1.0 | 7.8 | 5.0 | -3.2 | -6.2 |
Unfilled Orders | 0.9 | 0.1 | 0.4 | 4.9 | 2.0 | -1.2 | -2.7 |
Inventories | -0.1 | 0.9 | 0.2 | 5.1 | 4.5 | -0.7 | -0.8 |