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Economy in Brief

U.S. Factory Orders Decline, Led by Aircraft
by Tom Moeller  December 6, 2018

Manufacturers' orders fell 2.1% (+6.9% y/y) during October following a 0.2% September rise, revised from 0.7%. The Action Economics Forecast survey had looked for a 2.0% decline.

Durable goods orders fell 4.3% m/m (+7.8% y/y), revised from -4.4% in the advance report, after little change in September. The decline was led by fewer orders for defense and civilian aircraft. Excluding transportation altogether, new orders for durable goods improved 0.2% (4.6% y/y).

Orders for nondurable goods (which equal shipments) improved 0.3% (6.9% y/y) after a 0.5% rise. A 1.8% increase (24.3% y/y) in shipments from petroleum refineries led the gain. Textile product shipments also rose a steady 1.8% (12.4% y/y) and apparel shipments improved 0.3% (10.9% y/y). Basic chemical shipments held steady (5.4% y/y) and food product shipments rose 0.1% (0.2% y/y). Shipments of durable goods eased 0.5% (+6.9% y/y) after 0.9% increases in each of the prior two months. Computer & electronic product shipments rose 0.9% (5.9% y/y) and machinery shipments increased 0.3% (3.1% y/y).

Unfilled orders from the factory sector eased 0.1% (+4.8% y/y) after a 0.7% rise. Transportation sector order backlogs declined 0.3% (+4.8% y/y) and total unfilled orders less transportation rose 0.3% (4.8% y/y). Durable goods unfilled orders eased 0.1% (+4.8% y/y). Unfilled orders of machinery gained 0.4% (1.7% y/y) while computer & electronic order backlogs rose 0.4% (3.3% y/y).

Inventories in the manufacturing sector edged 0.1% higher (4.7% y/y) after a 0.6% jump. Durable goods inventories rose just 0.1% (4.4% y/y). Machinery inventories slipped 0.1% (+4.3% y/y) while inventories of computers & electronic products fell 1.0% (+1.1% y/y), reversing the prior month's rise. Electrical equipment & appliance inventories rose 0.4% (8.3% y/y) as transportation sector inventories also increased 0.4% (3.0% y/y). Nondurable goods inventories gained 0.2% (5.0% y/y) as petroleum refinery inventories climbed 0.5% (17.7% y/y). Basic chemical inventories jumped 0.7% (4.5% y/y) but paper product inventories slipped 0.1% (+1.8% y/y).

The factory sector figures are available in Haver's USECON database. The Action Economics Forecasts survey is in AS1REPNA.

Factory Sector (% chg) - NAICS Classification Oct Sep Aug Oct Y/Y 2017 2016 2015
New Orders -2.1 0.2 2.6 6.9 5.7 -2.9 -8.2
Shipments -0.1 0.7 0.7 6.9 5.0 -3.2 -6.2
Unfilled Orders -0.1 0.7 0.9 4.8 2.0 -1.2 -2.7
Inventories 0.1 0.6 0.1 4.7 4.5 -0.7 -0.8
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