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Economy in Brief

U.S. Factory Orders Inch Higher; Shipments Fall Again
by Tom Moeller  March 19, 2019

Manufacturers' orders gained 0.1% (4.2% y/y) during January, the same as in December which was unrevised. The 0.3% rise had been expected in the Action Economics Forecast Survey. Orders for durable goods improved 0.3% (8.4% y/y), unrevised from the advance report. More orders for transportation equipment led the advance with a 1.2% gain (16.3% y/y), powered by a 15.6% surge (26.1% y/y) in nondefense aircraft & parts. Motor vehicle & parts orders gained 0.4% (7.9% y/y). Factory orders excluding transportation eased 0.2% (+1.8% y/y). Electrical equipment bookings increased 1.4% (6.1% y/y), but orders for computers & electronic products declined 0.9% (+6.2% y/y). Also weakening were primary metals orders which fell 2.0% (+8.1% y/y).

Overall shipments from the factory sector fell 0.4% (+3.0% y/y). Shipments of durable goods declined 0.5% (+6.0% y/y), led by a 1.3% decline (+9.5% y/y) in transportation shipments. Total shipments excluding transportation eased 0.2% (+1.7% y/y), off for the third straight month. Machinery sector shipments gained 0.8% (4.0% y/y) and computer & electronic product shipments improved 0.1% (5.3% y/y). Nondurable goods shipments, which equal orders, declined 0.2% (+0.1% y/y), off for the third consecutive month. Petroleum refinery shipments eased 0.4% (-7.4% y/y). Paper product shipments gained 0.5% (0.8% y/y) but apparel shipments fell 0.3% (+3.0% y/y).

Unfilled orders in the factory sector gained 0.1% (4.3% y/y) following three consecutive months of decline. Transportation sector backlogs rose 0.1% (4.1% y/y), and excluding transportation, unfilled orders also rose 0.1% (4.3% y/y) after two 0.2% gains. Computer & electronic equipment backlogs rose 0.1% (3.9% y/y) but unfilled orders for electrical equipment & appliances declined 0.3% (+1.1% y/y). Backlogs of furniture & related products rose 0.7% (3.2% y/y). Unfilled machinery sector orders eased 0.1% (+2.2% y/y), down for the third straight month.

Inventories in the factory sector rose 0.5% (3.7% y/y), the largest increase in four months. The rise was driven by a 0.9% gain (3.6% /y) in transportation equipment inventories. Excluding transportation, inventories increased 0.4% (3.7% y/y). Durable goods inventories rose 0.5% (4.9% y/y) as machinery inventories rose 0.5% (5.9% y/y). Electrical equipment & appliance inventories rose 0.8% (8.6% y/y), but computer & electronic products inventories fell 0.2% (+0.7% y/y). Nondurable goods inventories strengthened 0.7% (1.8% y/y) as the value of petroleum refinery inventories surged 3.9% (-7.4% y/y) with higher prices. Apparel inventories fell 0.5% (+1.2% y/y), down for the third straight month, but paper product inventories rose 0.9% (3.4% y/y).

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

Factory Sector (% chg) - NAICS Classification Jan Dec Nov Jan Y/Y 2018 2017 2016
New Orders 0.1 0.1 -0.5 4.2 7.2 5.7 -2.9
Shipments -0.4 -0.2 -0.5 3.0 6.8 5.0 -3.2
Unfilled Orders 0.1 -0.1 -0.2 4.3 3.8 2.0 -1.2
Inventories 0.5 0.1 -0.1 3.7 3.5 4.5 -0.7
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