Global| Aug 02 2007U.S. Factory Inventory Growth Recovered
by:Tom Moeller
|in:Economy in Brief
Summary
Factory inventories rose 0.3% during June following a 0.4% gain during May. While moderate, the increases are up from the 0.1% three month average growth ended February. Growth in primary metals inventories picked up during the past [...]
Factory inventories rose 0.3% during June following a 0.4% gain during May. While moderate, the increases are up from the 0.1% three month average growth ended February.
Growth in primary metals inventories picked up during the past three months as did growth in light truck inventories. Growth in inventories of nondefense aircraft & parts also has soared. In most other durable goods categories, however, growth in inventories has slowed recently. Many industries have seen outright decumulation such as in furniture and computers & electronic products. 
A slowdown in growth of factory shipments caused the recent inventory back-up. Shipments have fallen in three of this year’s months. For June the three month growth rate fell to 1.2%, helped by a 0.6% decline in June. The same pattern of recovery then a fall in growth is evident in shipments less the transportation sector.
Total factory orders rose 0.6% in June and that reversed the prior month’s 0.5% decline. Durable goods orders jumped 1.3%. The rise, however, only recovered some of the prior month’s 2.4% decline. Factory orders less transportation fell 0.5% (-1.3% y/y) while orders (shipments really) to petroleum refineries were unchanged (-5.5% y/y.
Unfilled orders continued their rise with a 1.4% gain during June. Less the transportation sector, where backlogs of civilian aircraft are up 43.3% y/y, backlogs rose 0.1% (9.6% y/y).
| Factory Survey (NAICS) | June | May | Y/Y | 2006 | 2005 | 2004 |
|---|---|---|---|---|---|---|
| Inventories | 0.3% | 0.4% | 3.7% | 6.4% | 8.9% | 7.7% |
| New Orders | 0.6% | -0.5% | -0.7% | 5.1% | 11.6% | 6.9% |
| Shipments | -0.6% | 0.8% | -0.9% | 4.3% | 10.3% | 6.9% |
| Unfilled Orders | 1.4% | 0.9% | 19.6% | 20.0% | 15.0% | 3.9% |
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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