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Economy in Brief

U.S. Factory Orders Strengthen
by Tom Moeller  September 5, 2019

Manufacturers' orders rose 1.4% during July (0.3% y/y) following a little-revised 0.5% June gain. The Action Economics Forecast survey expected a 1.2% increase.

Durable goods orders jumped 2.0% (0.6% y/y) after a 1.8% decline. The gain compared to an advance report of a 2.1% rise. A 7.0% jump (2.3% y/y) in transportation sector orders led the overall rise, as nondefense aircraft orders surged. Electrical machinery orders rose 0.5% (4.8% y/y) and computer & electronics orders improved 0.4% (1.3% y/y).

Total shipments eased 0.2% (+0.5% y/y). Shipments of nondurable goods, which equal orders, rose 0.8% (-0.1% y/y) after a 0.7% decline. Shipments from petroleum refineries surged 2.9% (-5.6% y/y) after two months of sharp decline. Textile mill shipments gained 0.7% (-1.1% y/y) but apparel shipments dropped 2.8% (-1.4% y/y). Paper product shipments were little-changed (0.3% y/y) while food product shipments rose 0.8% (0.7% y/y).

Shipments of durable goods declined 1.1% (+1.0% y/y) after a 0.9% rise. Machinery shipments fell 1.9% (-0.6% y/y) and electrical equipment shipments eased 0.2% (+4.2% y/y). Transportation sector shipments declined 2.0% (+2.3% y/y) as nondefense aircraft shipments weakened 16.2% (-13.0% y/y). Shipments of electrical equipment & appliances eased 0.2% (+4.2% y/y) but computer & electronic product shipments improved 0.2% (3.2% y/y).

The level of unfilled orders of durable goods were unchanged following three straight months of decline. Primary metals backlogs rose 0.5% (2.8% y/y). Unfilled orders of machinery held steady (-1.5% y/y) while computer & electronic product backlogs rose 0.1% (2.7% y/y). Electronic equipment & appliance unfilled orders jumped 1.1% (1.0% y/y). Unfilled orders for furniture declined 1.0% (-1.1% y/y).

Inventories in the factory sector rose 0.2% (3.1% y/y) during July. Auto inventories surged 2.7% (21.3% y/y). Machinery inventories gained 0.4% (5.8% y/y) for the second straight month. Electrical equipment & appliance inventories rose 0.4% (8.2% y/y) but computer & electronic product inventories fell 0.2% (+0.4% y/y). Nondurable goods inventories eased 0.1% (+0.8% y/y) as petroleum inventories also slipped 0.1% (-4.9% y/y). Food products inventories rose 0.2% (1.1% y/y). Inventories of textile products rose 0.6% (2.7% y/y) but chemical product inventories eased 0.3% (+1.5% y/y).

The factory sector figures are available in Haver's USECON database. The expectation figure is in the AS1REPNA database.

Factory Sector (% chg) - NAICS Classification Jul Jun May Jul Y/Y 2018 2017 2016
New Orders 1.4 0.5 -1.3 0.3 7.3 5.7 -2.9
Shipments -0.2 0.1 0.1 0.5 6.9 5.0 -3.2
Unfilled Orders 0.0 -0.6 -0.8 -0.4 3.9 1.9 -1.1
Inventories 0.2 0.1 0.2 3.1 3.5 4.5 -0.7
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