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Economy in Brief

U.S. Factory Orders, Shipments & Inventories Decline
by Tom Moeller  March 5, 2020

Factory orders decreased 0.5% (-0.8% y/y) during January following a 1.9% December jump. This was the second monthly decline in the last three months. The Action Economics Forecast Survey expected a 0.1% slip. Durable goods orders weakened 0.2% (-4.0% y/y) following a 2.8% surge, which was strengthened by a jump in orders for nondefense aircraft. Machinery orders increased 2.1% (-1.0% y/y) but electrical machinery orders fell 1.1% (+3.2% y/y). Orders for computers & electronic products eased 0.2% (+0.6% y/y). Orders for nondurable products, which equal shipments, declined 0.8% (+2.6% y/y) as petroleum refinery shipments fell 4.6% (+6.4% y/y) and reversed December's rise. Basic chemical shipments improved 0.1% (2.4% y/y) but apparel shipments declined 0.6% (-0.2% y/y).

Shipments of durable goods eased 0.2% (-3.3% y/y) as transportation shipments fell 1.4% (-0.2% y/y). Shipments outside of the transportation sector eased 0.3% (+1.5% y/y). Machinery shipments rose 0.6% (-1.7% y/y) while electrical equipment shipments declined 1.6% (+1.4% y/y). Transportation sector shipments fell 1.4% (-9.2% y/y) as nondefense aircraft shipments were off 20.8%. Shipments of computers & electronic products improved 0.3% (1.2% y/y).

Unfilled orders for manufactured products held steady (-2.3% y/y) for a second straight month. Transportation sector backlogs eased slightly, so excluding transportation, unfilled orders rose 0.1%. Machinery backlogs slipped 0.1% (-3.7% y/y). while computer & electronic equipment order backlogs eased 0.1% (+0.7% y/y). Electronic equipment & appliance backlog rose 0.6% (6.7% y/y).

Factory sector inventories declined 0.1% (+2.5% y/y). Transportation inventories rose 0.2% (11.9% y/y) as auto inventories strengthened 2.4% (14.7% y/y). Excluding the transportation sector, inventories fell 0.2% both m/m and y/y. Electrical equipment inventories gained 0.1% (2.7% y/y) while computer & electronic product inventories eased 0.2% (+1.1% y/y). Nondurable product inventories fell 0.2% (-0.1% y/y) as petroleum refinery stockpiles gained 0.3% (5.0% y/y). Apparel inventories declined 0.5% (-2.8% y/y) and food product inventories eased slightly (+1.3% 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 Jan Dec Nov Jan Y/Y 2019 2018 2017
New Orders -0.5 1.9 -1.2 -0.8 -0.5 7.3 5.7
Shipments -0.5 0.5 0.3 -0.4 0.7 6.9 5.0
Unfilled Orders 0.0 0.0 -0.6 -2.3 -2.1 3.9 1.9
Inventories -0.1 0.4 0.3 2.5 3.1 3.5 4.5
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