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Economy in Brief

U.S. Factory Orders & Shipments Post Strong Gains in June
by Tom Moeller  August 4, 2020

• Factory orders increase again, notably for motor vehicles.

• Shipments gain is broad-based.

• Inventories build up.

New orders for manufactured goods increased 6.2% in June (-10.6% y/y) after May's 7.7% gain, revised from 8.0%. A 5.0% rise had been expected in the Action Economics Forecast Survey. Orders for durable goods increased 7.6% (-12.5% y/y), revised from 7.3% in the advance report issued last month. Transportation equipment orders rose 20.2% (-29.1% y/y). Motor vehicle orders improved 27.8% (-4.6% y/y) and defense aircraft bookings strengthened. Orders for metals rose strongly while machinery orders gained 3.0% (-7.8% y/y). Electrical equipment & appliance orders rose 1.9% (-7.9% y/y).

Nondurable goods orders, which equal shipments, rose 5.0% in June (-8.8% y/y). Shipments from petroleum refineries strengthened 30.2% (-37.0% y/y) as prices rose. Food product shipments gained 0.4% (0.8% y/y). Textile product shipments rose 6.7% (-10.0% y/y) but apparel shipments held steady. Shipments of durable goods strengthened 15.1% (-9.4% y/y) as transportation shipments surged by roughly one-half (-19.2% y/y) due to broad-based increases. Electrical equipment shipments rose 2.1% (-7.0% y/y) while shipments of furniture improved 8.5% (-1.9% y/y).

Order backlogs declined 1.4% (-4.8% y/y), off for the third month in the last four. Transportation backlogs fell 2.1% (-6.7% y/y). Excluding the transportation sector, unfilled orders improved 0.1% (-0.3% y/y). Order backlogs of electrical equipment & appliances rose 0.1% (4.9% y/y). Unfilled orders for computers & electronic products rose 0.2% (1.1 y/y). Machinery order backlogs held steady (-1.1% y/y for a second month.

Inventories of manufactured products rose 0.6% in June (-0.4% y/y). The increase followed declines in four of the prior five months. Transportation sector inventories rose 1.5% (11.5% y/y), while outside transportation, inventories gained 0.3% (-3.1% y/y). Furniture inventories held steady (-2.6% y/y) and electrical equipment & appliance inventories eased 0.3% both m/m and y/y. Computer & electronic product inventories eased 0.1% (+0.7% y/y) while machinery inventories declined 0.5% (-2.1% y/y), off for the fifth month this year. Inventories of nondurable products rose 1.5% (-4.4% y/y) as petroleum refinery inventories rose 14.3% (-22.5% y/y). Apparel inventories gained 0.3% (-2.9% y/y) but food product inventories held steady (-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 Jun May Apr Jun Y/Y 2019 2018 2017
New Orders 6.2 7.7 -13.5 -10.6 -0.2 6.9 5.6
Shipments 9.8 3.0 -14.0 -9.1 0.9 6.7 4.4
Unfilled Orders -1.4 0.0 -1.5 -4.8 -1.9 3.8 2.7
Inventories 0.6 0.2 -0.5 -0.4 2.8 3.7 4.3
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