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Economy in Brief
U.S. Current Account Deficit Deepens to Record in Q1'22
The U.S. current account deficit deepened to $291.4 billion during Q1'22...
Kansas City Fed Manufacturing Index Declines Further in June But Remains Positive
The Kansas City Fed reported that its manufacturing sector business activity index fell to 12 in June...
U.S. Unemployment Claims Edged Down
Initial claims for unemployment insurance filed in the week ended June 18 declined by 2,000 to 229,000...
U.S. Energy Prices Reverse Earlier Gains
Retail gasoline prices surged to $5.01 per gallon (63.1% y/y)...
S&P Global Flash PMIs Weaken -Except for Japan
The S&P Global PMI indexes weakened across the board in June...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Tom Moeller October 3, 2019
Factory sector activity has been under pressure. Manufacturers' orders slipped 0.1% during August (-1.9% y/y) following an unrevised 1.4% increase during July. The Action Economics Forecast survey expected a 0.5% decline. Durable goods orders inched up 0.2% (-3.0% y/y) after a 2.1% increase, unchanged from the advance report. Transportation sector orders eased 0.4% (-8.3% y/y) as nondefense aircraft & parts bookings dropped 17.1%. This decline was countered by a one-third m/m increase (-10.6% y/y) in orders for defense aircraft & parts. Electrical machinery orders dropped 1.7% (+2.8% y/y) but machinery orders improved 0.4% (-1.2% y/y).
Total shipments also eased 0.1% (-0.3% y/y). Shipments of nondurable goods, which equal orders, slipped 0.3% (-0.8% y/y), the third decline in the last four months. The value of shipments from petroleum refineries retreated 4.0% (-10.0% y/y), off for the third month in the last four, due to falling energy product prices. Textile mill shipments eased 0.4% (-3.1% y/y) and apparel shipments slipped 0.3% (-3.6% y/y). Paper product shipments improved 0.2% (0.3% y/y) while food product shipments rose 0.3% (1.2% y/y).
Shipments of durable goods edged 0.1% higher (0.2% y/y) after falling 1.2% in July. Machinery shipments increased 1.6% (1.5% y/y) but electrical equipment shipments were off 0.8% (+2.4% y/y). Transportation sector shipments declined 0.7% (-0.9% y/y) as nondefense aircraft shipments weakened 1.8% (-30.2% y/y). These shipments have been falling steadily for nine months. Shipments of electrical equipment & appliances eased 0.8% (+2.4% y/y) and computer & electronic product shipments slipped 0.4% (+2.1% y/y).
The level of unfilled orders of durable goods edged 0.1% higher (-0.9% y/y) for a second consecutive month. Backlogs in the transportation sector held steady (-1.7% y/y), also for a second straight month. Unfilled orders outside of transportation rose 0.2% (0.9% y/y). Primary metals backlogs jumped 1.3% both m/m and y/y. Unfilled orders of machinery fell 0.5% (-2.7% y/y) while computer & electronic product backlogs rose 0.1% (2.5% y/y) for a fourth straight month. Electronic equipment & appliance unfilled orders increased 0.5% (1.5% y/y) while furniture backlogs rose 0.8% (0.3% y/y).
Inventories in the factory sector remained fairly steady in August, but they strengthened 2.9% y/y. Auto inventories added 0.5% (19.7% y/y) to strong gains in six of the prior seven months. Machinery inventories eased 0.1% (+4.9% y/y) following two straight months of 0.4% increase. Electrical equipment & appliance inventories fell 0.3% (+7.1% y/y), but computer & electronic product inventories were fairly steady. Their 0.5% y/y rate of accumulation was down, however, from a 5.0% peak during all of 2017. Nondurable goods inventories eased 0.5% (-0.3% y/y) as the value of petroleum inventories declined 2.7% (-9.1% y/y). Food products inventories slipped 0.3% (+0.6% y/y). Inventories of textile products fell 1.8% (-0.2% y/y) and basic chemical product inventories eased 0.1% (+0.8% 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 | Aug | Jul | Jun | Aug Y/Y | 2018 | 2017 | 2016 |
---|---|---|---|---|---|---|---|
New Orders | -0.1 | 1.4 | 0.5 | -1.9 | 7.3 | 5.7 | -2.9 |
Shipments | -0.1 | -0.3 | 0.1 | -0.3 | 6.9 | 5.0 | -3.2 |
Unfilled Orders | 0.1 | 0.1 | -0.6 | -0.9 | 3.9 | 1.9 | -1.1 |
Inventories | -0.0 | 0.1 | 0.1 | 2.9 | 3.5 | 4.5 | -0.7 |