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Economy in Brief

U.S. Factory Orders Increase 0.3% As Expected in September
by Winnie Tapasanun  November 3, 2022

• Sept. new orders +0.3%; Aug. revised up to +0.2% (from virtually unchanged).

• Shipments rise 0.2%, w/ a 0.2% gain in nondurable goods.

• Unfilled orders increase 0.5%, the same m/m pace as in Aug., while inventories rebound 0.2%.

Total factory orders rose 0.3% m/m (12.0% y/y) in September after a 0.2% increase in August (-0.01% originally) and a 1.0% decline in July, according to the U.S. Census Bureau. The September m/m rise was the 11th in 12 months. The latest figure was as expected in the Action Economics Forecast Survey. Factory orders excluding the transportation sector dipped 0.1% (+9.6% y/y), the second m/m easing in three months, after a 0.1% August uptick.

Durable goods orders grew 0.4% (11.4% y/y) in September, the sixth m/m gain in seven months, after a 0.2% rise in August (also +0.4% for Sept. in the advance report). The September rise reflected m/m orders increases of 2.2% (25.3% y/y) in transportation equipment and 0.8% (2.7% y/y) in furniture & related products. To the downside, orders for primary metals (-1.9%; +4.6% y/y), electrical equipment, appliances & components (-1.2%; +6.3% y/y), fabricated metal products (-0.5%; +2.4% y/y), computers & electronic products (-0.4%; +6.4% y/y), and machinery (-0.1%; +7.5% y/y) posted their m/m declines in September.

Total shipments increased 0.2% (11.8% y/y) in September, the 18th m/m gain in 19 months, after a 0.7% rebound in August. Excluding transportation, shipments were virtually unchanged (10.2% y/y) after a 0.2% August increase. Shipments of durable goods industries rose 0.2% (10.9% y/y), the 13th straight m/m rise, on top of a 1.3% August gain. Shipments grew in some key industry groups, notably by gains of 1.2% (20.7% y/y) in transportation equipment and 0.7% (8.0% y/y) in computers & electronic products. In contrast, shipments for primary metals (-2.0%; +3.4% y/y) and miscellaneous durable goods (-1.2%; +4.1% y/y) fell in September, posting their third m/m drops in four months. Shipments for electrical equipment, appliances & components fell back 0.6% (+9.1% y/y) in September, the second m/m fall in three months.

Nondurable goods orders, which equal nondurable goods shipments, rose 0.2% (12.7% y/y) in September, the eighth meaningful m/m rise in nine months, after a 0.2% rebound in August. The September gain reflected monthly rises of 3.8% (12.2% y/y) in leather & allied products, 1.5% (1.8% y/y) in apparel, 1.2% (4.8% y/y) in textile products, 1.0% (44.1% y/y) in petroleum & coal products, 0.6% (12.4% y/y) in printing, 0.2% (5.7% y/y) in basic chemicals, and 0.1% (1.6% y/y) in paper products. In contrast, nondurable goods shipments for the following items registered m/m drops in September: plastics & rubber products (-0.6%; +5.8% y/y), food products (-0.4%; +3.9% y/y), beverage & tobacco products (-0.4%; +14.5% y/y), and textile mills (-0.2%; +3.4% y/y).

Unfilled orders rose 0.5% (6.9% y/y) in September, the 21st straight m/m gain, after rising at the same pace in August. Excluding transportation, unfilled orders grew 0.2% (4.5% y/y) after increases of 0.3% in both August and July. The September gain in unfilled orders was led by 0.8% (11.5% y/y) in electrical equipment, appliances & components, 0.7% (8.7% y/y) in transportation equipment, and 0.5% (8.0% y/y) in machinery but partly offset by a 0.5% decline (-3.8% y/y) in furniture & related products.

Inventories increased 0.2% (7.8% y/y) in September following downticks of 0.13% in August and 0.02% in July. They showed their string of increases from October 2020 to June 2022. Excluding transportation, inventories recovered 0.2% (9.4% y/y) after a 0.2% August decline. Inventories of durable goods rose 0.2% (7.1% y/y), continuing their advances since February 2021, while inventories of nondurable goods inched up 0.05% (8.9% y/y) following two consecutive monthly decreases.

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

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