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Economy in Brief

U.S. Factory Sector Orders Increase; Inventory Growth Decelerates
by Tom Moeller  December 5, 2019

Factory orders improved 0.3% (-1.2% y/y) during October following a 0.8% September decline, revised from 0.6%. The increase matched expectations in the Action Economics Forecast Survey. Orders for durable goods rose 0.5% (-0.9% y/y), revised from a 0.6% gain in the advance report. Orders for transportation equipment improved 0.7% (-1.3% y/y) and computers & electronic products orders increased 0.6% (-1.4% y/y). Machinery orders rose 1.2% (-2.1% y/y). Excluding transportation, new orders rose 0.2% (-1.2% y/y).

Shipments of nondurable goods, which equal orders, held steady (-1.6% y/y) after declining in four of the prior five months. Textile product shipments declined 0.9% (-5.5% y/y) but apparel shipments rose 1.1% (-2.9% y/y). Shipments from petroleum refineries surged 1.0% but remained down 11.9% y/y. Basic chemical shipments advanced 0.2% (2.4% y/y). Shipments of food products eased 0.2% (+1.3% y/y). Durable goods shipments were little changed (-1.5% y/y). Machinery shipments grew 1.0% but were fairly steady y/y. Primary metals shipments fell 0.9% (-7.2% y/y) and fabricated metals shipments improved 0.2% (2.4% y/y). Shipments of computers & electronic products rose 0.5% (1.2% y/y) after two months of decline. Electrical equipment & appliance shipments fell 2.0% (-0.1% y/y), but furniture shipments jumped 1.2% (4.6% y/y). Transportation sector shipments eased 0.4% (-4.9% y/y), off for the fourth straight month.

Unfilled orders in the factory sector improved 0.1% (-1.6% y/y) as transportation equipment backlogs also rose 0.1% (-2.4% y/y). Civilian aircraft backlogs fell 0.3% (-3.9% y/y) while unfilled orders of motor vehicles declined 1.3% (-4.7% y/y) and have been declining since February. Excluding transportation, backlogs held steady both m/m and y/y. Electrical equipment backlogs rose 0.6% (2.8% y/y) while computer backlogs were flat (1.8% y/y). Unfilled orders for machinery were unchanged (-3.9% y/y).

Inventories of manufactured products rose 0.1% (2.4% y/y).  A 0.2% increase had been expected. Transportation sector inventories jumped 1.3% (12.5% y/y). Auto inventories fell 1.5% (+21.4% y/y) but civilian aircraft inventories rose 2.0% (17.9% y/y). Excluding transportation, inventories fell 0.2% and were unchanged y/y. Machinery inventories eased 0.1% (+3.2% y/y) and computer inventories fell 0.4% (+0.6% y/y). Inventories of nondurable products eased 0.3% (-1.4% y/y) as food product inventories fell 0.8% (+0.6% y/y). Basic chemical inventories also eased 0.2% (+0.4 y/y) but apparel inventories increased 0.6% (-1.5% y/y). Textile product inventories rose 0.2% (0.3% 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 Oct Sep Aug Oct Y/Y 2018 2017 2016
New Orders 0.3 -0.8 -0.1 -1.2 7.3 5.7 -2.9
Shipments 0.0 -0.4 -0.3 -1.5 6.9 5.0 -3.2
Unfilled Orders 0.1 -0.0 0.1 -1.6 3.9 1.9 -1.1
Inventories 0.1 0.3 -0.1 2.4 3.5 4.5 -0.7
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