Global| Jan 05 2010U.S. Factory Inventories & Shipments Increase Again
by:Tom Moeller
|in:Economy in Brief
Summary
For the second straight month factory inventories increased, a turn following thirteen consecutive months of decline. Moreover, October gains were revised up slightly. The latest monthly increase owed largely to a 3.8% jump (-26.5% [...]
For the
second straight month factory inventories increased, a turn following
thirteen consecutive months of decline. Moreover, October gains were
revised up slightly. The latest monthly increase owed largely to a 3.8%
jump (-26.5% y/y) in auto inventories which was the second consecutive
month of strong gain. That rise was offset by a 1.9% drop (+6.0% y/y)
in defense aircraft and a 0.3% slip (+2.4% y/y) in nondefense aircraft
inventories. Elsewhere, the inventory turn has been limited to the
metals and petroleum industries along with higher prices.
Apparel inventories (-18.6% y/y) continued their decline of more than a year as did machinery inventories (-13.3% y/y), though the latter's decline has slowed significantly. Electrical equipment inventories (-18.9% y/y) also continued to fall but, again, the monthly rates of decline have slowed as they have for computers & electronic products (-9.9% y/y).
Higher factory shipments are likely to encourage the holding and/or building of inventories. Shipments rose 1.0% during November for the third straight month of strong increase. Shipments of electrical equipment shipments (-9.2% y/y) have been strong for two months as have machinery shipments (-20.3% y/y) for two of the last three. Primary metals (-16.6% y/y) have shown notable monthly increases since May and furniture inventories (-14.5% y/y) also seem to have turned toward accumulation.
Improved factory new orders are part of the sector's improvement. They rose 1.1% in November, in part reflecting the strength in petroleum prices. A 0.5% monthly increase had been expected. Elsewhere, metals orders (-7.3% y/y) have improved as have orders for machinery (-14.2% y/y) and computers (-2.4% y/y). New orders for electrical equipment & appliances have perhaps turned the most, moving to a 0.7% y/y gain from a 30.5% decline as of June.
The Manufacturers' Shipments, Inventories and Orders (MSIO) data are available in Haver's USECON database.
The Economic Outlook is yesterday's speech by Fed Governor Elizabeth A. Duke and it can be found here.
| Factory Survey (NAICS, %) | November | October | September | Y/Y | 2008 | 2007 | 2006 |
|---|---|---|---|---|---|---|---|
| Inventories | 0.2 | 0.6 | -1.3 | -10.3 | 2.1 | 3.7 | 8.2 |
| Excluding Transportation | 0.3 | 0.5 | -1.0 | -11.8 | -0.6 | 2.7 | 7.9 |
| New Orders | 1.1 | 0.8 | 1.6 | -3.2 | 0.1 | 1.9 | 6.2 |
| Excluding Transportation | 1.9 | 1.0 | 1.5 | -2.1 | 3.1 | 1.2 | 7.4 |
| Shipments | 1.0 | 1.5 | 1.3 | -3.8 | 1.7 | 1.2 | 5.9 |
| Excluding Transportation | 1.3 | 2.2 | 0.6 | -3.6 | 3.7 | 1.5 | 6.7 |
| Unfilled Orders | -0.7 | -0.6 | -0.4 | -10.9 | 3.5 | 17.1 | 15.3 |
| Excluding Transportation | 0.2 | -0.4 | 0.6 | -11.3 | -1.0 | 8.2 | 16.0 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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