U.S. Factory Orders Reflect Durables Strength

Manufacturing sector orders increased 1.2% (5.5% y/y) during January following an unrevised 1.3% December rise. Durable goods orders increased 2.0% (1.6% y/y). Transportation sector orders rebounded 6.2% (-4.2% y/y) with a two-thirds surge in nondefense aircraft & parts. Defense aircraft & parts orders similarly strengthened. Total factory sector orders excluding defense improved 1.0% (5.5% y/y) following a 2.4% gain. Orders outside of the transportation sector increased 0.3% (7.5% y/y). Bookings for computers & electronic products declined 1.9% (+4.0% y/y). Machinery orders improved 0.9% (4.3% y/y), but electrical equipment orders eased 2.6% (+0.9% y/y).

Durable goods shipments remained unchanged (3.9% y/y). Transportation equipment shipments eased 0.2% (+1.5% y/y), auto shipments gained 1.3% (-13.4% y/y). Nondefense aircraft shipments rose 0.3% (-7.3% y/y) and defense aircraft & parts shipments fell 5.6% (-15.4% y/y). Shipments of machinery fell 1.2% (+2.1% y/y), and computer & electronic product shipments jumped 6.0% (8.9% y/y).

Total factory sector shipments gained 0.2% (6.7% y/y). Nondurable goods shipments (which equal orders) improved 0.4% (9.5% y/y). The rise reflected a 2.4% increase (47.1% y/y) in petroleum refinery shipments. Basic chemical shipments were little-changed (5.1% y/y), and textile mill shipments rose 0.7% (3.0% y/y) after three months of strong gains. Food product shipments posted a 0.3% rise (3.6% y/y). Paper product shipments eased 0.7% (+1.7% y/y).

Unfilled orders declined 0.4% (-2.0% y/y) continuing the weak trend of the last year. Transportation sector backlogs fell 0.7% (-3.9% y/y). Outside of the transportation sector, unfilled orders improved 0.4% (2.2 % y/y). Electrical equipment & appliance backlogs increased 0.3% (10.2% y/y) after two months of strong gain. Unfilled orders for computers & electronic products gained 0.4% (4.5% y/y), and machinery order backlogs improved 0.6% (-3.6% y/y).

Inventories in the factory sector edged 0.2% higher in January (0.8% y/y). Outside of the transportation sector, inventories rose 0.3% (1.6% y/y). Durable goods inventories gained 0.1% (-0.7% y/y), but fabricated metals inventories improved 0.2% (-0.2% y/y). Machinery inventories fell 0.2% (-1.1% y/y), but inventories of computers & electronic products increased 0.9% (1.3% y/y). Electrical equipment inventories increased 0.5% (0.1% y/y).

The factory sector figures are available in Haver's USECON database.

Monetary Policy: By Rule, By Committee, or By Both? is the title of Friday's speech by Fed Vice Chairman Stanley Fischer, and it is available here.