• Orders increase slows.

• Increased shipments again paced by petroleum.

• Order backlogs and inventories rise moderately.

Factory sector activity remains solid. New orders for manufactured goods increased 0.4% (15.9% y/y) during July following an unrevised 1.5% gain during June. A 0.3% increase was expected in the Action Economics Forecast Survey. The 2.3% May increase was unrevised.

Durable goods orders eased 0.1% (+17.7% y/y) in July following an unrevised 0.8% June increase. The July dip was unrevised from the advance report. Transportation sector orders fell 2.1% (+19.8% y/y) following a 1.4% gain. Machinery orders increased 2.9% (22.1% y/y) but electrical equipment orders fell 1.7% (+14.4% y/y).

Nondurable goods orders, which equal shipments, increased 0.9% (14.2% y/y) in July after rising 2.2% in June. Shipments from petroleum refineries surged 1.6% (57.3% y/y) with higher prices. Basic chemical shipments rose 1.3% (10.5% y/y) while shipments of food products rose 0.3% (5.1% y/y). Apparel shipments fell 0.7% (+5.3% y/y) and textile product shipments eased 0.6% (+11.5% y/y).

Shipments of durable goods rose 2.2% (10.6% y/y) in July after gaining 1.6% in June. Transportation equipment shipments rose 4.6% (2.3% y/y) but furniture shipments eased 0.7% (-1.6% y/y). Electrical equipment & appliance shipments rose 1.2% (16.1% y/y) while computer & electronic product shipments improved 0.4% (5.4% y/y).

The value of unfilled orders rose 0.3% (2.0% y/y) in July following a 0.8% rise. Transportation sector backlogs eased 0.1% (-3.3% y/y) but excluding transportation, unfilled orders rose 1.2% (14.3% y/y). Electrical equipment order backlogs gained 0.6% (17.3% y/y).

Inventories of manufactured products rose 0.5% (6.5% y/y) in July following a 1.0% June rise. Transportation equipment inventories increased 0.2% (4.0% y/y) and excluding transportation, inventories gained 0.6% (7.2% y/y). Durable goods inventories increased 0.6% (6.0% y/y). Nondurable goods inventories rose 0.3% (7.3% y/y) as petroleum inventories strengthened 1.1% (39.0% y/y). Basic chemical inventories rose 0.2% (5.4% y/y) but apparel inventories declined 2.0% (-2.3% y/y).

The factory sector data are available in USECON database. The Action Economics Forecast Survey is in the AS1REPNA database.