Global| Jan 04 2011U.S. Factory Shipments Rise With Higher Oil Prices
by:Tom Moeller
|in:Economy in Brief
Summary
There's a recovery underway in the factory sector, but it's losing steam. Shipments of manufactured goods rose 0.8% in November (5.9% y/y) after a 0.4% October increase, but the magnitude of that recovery is misleading. Higher oil [...]
There's a recovery underway in the factory sector, but it's losing steam. Shipments of manufactured goods rose 0.8% in November (5.9% y/y) after a 0.4% October increase, but the magnitude of that recovery is misleading. Higher oil prices account for much of the recent gain. Less petroleum factory shipments rose just 0.3% (5.2% y/y) during November after a 0.7% October decline. For durable goods alone, shipments slipped 0.1% (+4.6% y/y), down for the third month in the last four. Orders for durable goods slipped 0.3% which was an upward revision from the advance report of a 1.3% decline. However, the 10.5% y/y increase is half that earlier in the year.
Factory inventories are growing. During November the 0.8% increase followed a 1.1% gain and the increase brought the inventory level to its highest since February 2009. The inventory/shipments ratio held steady in November at 1.28 but that was up from the January low of 1.24. Inventories at all three stages of fabrication are rising; the increases in materials & supplies, 5.4% y/y, and work-in-process, 8.2% y/y, suggest that factory managers may believe their demand is moving ahead, so they should rebuild stocks. Finished goods inventories rose 6.4% y/y.
The Manufacturers' Shipments, Inventories and Orders (MSIO) data are available in Haver's USECON database.
| U.S. Manufacturing Sector (NAICS, %) | Nov | Oct | Sept | Y/Y | 2009 | 2008 | 2007 |
|---|---|---|---|---|---|---|---|
| Inventories | 0.8 | 1.1 | 1.1 | 6.6 | -8.8 | -0.8 | 7.6 |
| New Orders | 0.7 | -0.7 | 3.0 | 8.7 | -17.8 | -1.0 | 8.7 |
| Shipments | 0.8 | 0.4 | 0.7 | 5.9 | -15.6 | 2.3 | 6.4 |
| Unfilled Orders | 0.6 | 0.7 | 1.3 | 3.1 | -11.1 | 2.8 | 31.2 |
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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