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Economy in Brief
Philadelphia Fed Manufacturing Index Jumps in January
The Federal Reserve Bank of Philadelphia Factory Sector Business Conditions Index jumped to January to 26.5...
U.S. Initial Jobless Claims Ease, but Are Still High
Initial claims for unemployment insurance fell to 900,000 in the week ended January 16...
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The spread of the virus in Franc is still untamed...
U.S. Home Builder Sentiment Slips in January
The Composite Housing Market Index from the NAHB-Wells Fargo declined 3.5% m/m (+10.7% y/y) in January...
Decline in Refinancing Drags Down U.S. Mortgage Applications
The MBA Mortgage Loan Applications Index fell 1.9% w/w (+56.2% y/y) in the weekend January 15...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Carol Stone, CBE December 4, 2020
• Factory orders rise for a sixth straight month.
• Shipments extend uptrend.
• Order backlogs continue to decline while inventories turn modestly higher.
Manufacturing activity expanded further in October, with new orders increasing for a sixth straight month, this time by 1.0% (-2.8% y/y) after September's 1.3%, revised from 1.1%. The Action Economics Forecast Survey had expected an 0.8% rise in October.
Orders in the durable goods sector rose 1.3% m/m, which was down 0.2% y/y. Fabricated metal products had the largest increase, 2.3%, and transportation equipment orders increased 1.4%. Shipments of durable goods rose 1.3% (+1.2% y/y). For more details on the durable goods sector, see last week's report.
Factory shipments rose 1.0% (-2.1% y/y) in October. Nondurable goods shipments, which equal nondurable goods orders, increased 0.7% (-5.3% y/y) after rising 0.5% during September. Among the largest nondurable goods producers, basic chemical shipments rose 1.1% in October (2.0% y/y), and shipments from petroleum refineries rose 0.8% (-27.6% y/y).
Unfilled orders of durable goods eased 0.2% for a second month (October -6.6% y/y) and the eighth consecutive month without an increase. But the weakness was heavily concentrated in transportation equipment, for which order backlogs constitute 67% of the overall total for durable goods; In October, that industry group saw backlogs fall 0.6% (10.2% y/y), mostly in aircraft. Other industries saw their backlogs grow by 0.5% (+1.6% y/y)
Inventories of manufactured products rose 0.2% in October (-1.3% y/y), following a 0.1% dip in September. Durable goods stocks rose 0.2% (+0.5% y/y) and those for nondurable goods rose 0.1% (-3.9% y/y) Transportation increased 0.4% (7.1% y/y). Durable goods inventories outside of transportation rose 0.2% (--2.8% y/y). Nondurable goods inventories edged up 0.1% (-3.9% y/y) even as petroleum refinery inventories continued to decline, falling 1.9% in the month (-22.3% y/y). Chemical industry stocks rose 0.6% (+0.8% y/y).
All these factory sector figures and West Texas intermediate oil prices are available in Haver's USECON database.
Factory Sector (% chg) - NAICS Classification | Oct | Sep | Aug | Oct Y/Y | 2019 | 2018 | 2017 |
---|---|---|---|---|---|---|---|
New Orders | 1.0 | 1.3 | 0.6 | -2.8 | -0.1 | 6.8 | 5.9 |
Shipments | 1.0 | 0.5 | 0.3 | -2.1 | 1.0 | 6.6 | 4.7 |
Unfilled Orders | -0.2 | -0.2 | -0.6 | -6.6 | -1.8 | 3.9 | 2.8 |
Inventories | 0.2 | -0.1 | 0.0 | -1.3 | 2.8 | 3.6 | 4.2 |