U.S. Factory Orders Up for the Fourth Time in Five Months in December
Summary
- Manufacturers’ new orders +0.2% (as expected; +2.3% y/y) in Dec. vs. +2.6% (+3.2% y/y) in Nov.
- Durable goods orders (-0.01%) and shipments (+0.05%) are virtually unchanged, while nondurable goods orders rise 0.4%, the first m/m gain since Sept.
- Unfilled orders grow 1.3%, the 12th m/m increase in 13 months.
- Inventories tick up 0.1% after holding steady in Nov. and Oct.
Total factory orders increased 0.2% m/m (2.3% y/y) in December after a 2.6% rise in November (unrevised) and a 3.4% drop in October (unrevised), according to data from the U.S. Census Bureau. The December reading matched the forecast in the Action Economics Forecast Survey. The December m/m increase was the fourth in five months. Notably, orders for nondefense aircraft & parts were up 0.4% in December after an outsized 84.1% rebound in November. Factory orders excluding defense rose 0.4% (2.7% y/y) in December, up four of the last five months, after a 3.2% gain in November. Factory orders excluding the transportation sector rose 0.4% (0.8% y/y), the sixth m/m rise in seven months, on top of a 0.2% November increase. Factory orders rose 0.9% in 2023 after having gained 12.5% in 2022.
Durable goods orders were essentially unchanged m/m (-0.01%; +4.8% y/y) in December after a 5.4% rebound in November (roughly the same as +0.02% m/m for December in the advance report on Jan. 25). The December unchanged number reflected m/m orders readings of no change (-0.5% y/y) in furniture & related products, a marginal 0.1% increase (0.6% y/y) in machinery, and a 0.9% drop (+9.5% y/y) in transportation equipment. To the upside, the following durable goods orders rose m/m in December: electrical equipment, appliances & components (1.4%; 5.9% y/y), primary metals (1.3%; 2.6% y/y), fabricated metal products (0.8%; 4.1% y/y), and computers & electronic products (0.4%; 4.4% y/y).
Nondurable goods orders, which equal nondurable goods shipments, rose 0.4% (-0.02% y/y) in December after holding steady in November and falling 1.8% in October. The December rise reflected m/m increases of 1.8% (8.7% y/y) in beverage & tobacco products, 1.1% (2.9% y/y) in leather & allied products, 0.7% (1.0% y/y) in plastics & rubber products, 0.7% (-8.4% y/y) in apparel, 0.6% (-2.5% y/y) in printing, 0.5% (0.7% y/y) in food products, 0.5% (-4.2% y/y) in textile products, 0.4% (2.5% y/y) in basic chemicals, and 0.3% (0.1% y/y) in paper products. To the downside, nondurable goods shipments for petroleum & coal products slid 0.3% (-5.5% y/y) in December, the third consecutive m/m slide, after a 1.0% decrease in November; meanwhile, those for textile mills held roughly steady (-4.7% y/y) following two successive m/m declines.
Total shipments were virtually unchanged m/m (0.05%; 0.6% y/y) in December following a 0.5% increase in November and a 1.3% drop in October. Excluding transportation, shipments rose 0.2% (0.5% y/y), the sixth m/m rise in seven months, after a 0.1% November uptick. Shipments of durable goods industries fell 0.3% (+1.2% y/y), the third m/m decline in four months, after a 1.0% increase in November. The December fall reflected m/m shipments drops of 0.9% in machinery (+1.3% y/y), 0.8% (+0.9% y/y) in transportation equipment, 0.3% (-1.3% y/y) in wood products, 0.3% (+1.4% y/y) in computers & electronic products, and 0.2% (+0.7% y/y) in nonmetallic mineral products. In contrast, the following durable goods shipments rose m/m in December: miscellaneous durable goods (0.7%; 0.6% y/y), fabricated metal products (0.3%; 3.0% y/y), electrical equipment, appliances & components (0.2%; 4.4% y/y), and primary metals (0.1%; 1.2% y/y). Meanwhile, shipments for furniture & related products were virtually unchanged m/m (-2.9% y/y) following a 0.2% November rebound.
Unfilled orders rose 1.3% (9.5% y/y) in December, the 12th m/m advance in 13 months, after rising at the same pace in November. Excluding transportation, unfilled orders rebounded 0.2% (-0.5% y/y) in December following a 0.1% downtick in both November and October. Backlogs of durable goods also rose 1.3% (9.5% y/y), reflecting increases of 2.0% (16.0% y/y) in transportation equipment, 1.2% (-4.5% y/y) in furniture & related products, and 0.8% (1.5% y/y) in primary metals.
Inventories edged up 0.1% (-0.2% y/y) in December after being essentially unchanged in the prior two months. Excluding transportation, inventories dipped 0.1% (-1.0% y/y) following no change in November. Durable goods inventories grew 0.4% (1.3% y/y) in December, the largest of five straight m/m increases, while nondurable goods inventories fell 0.3% (-2.4% y/y), the third consecutive m/m fall.
The factory sector data are available in Haver's USECON database. The Action Economics Forecast Survey is in the AS1REPNA database.
Winnie Tapasanun
AuthorMore in Author Profile »Winnie Tapasanun has been working for Haver Analytics since 2013. She has ~20 years of working in the financial services industry. As Vice President and Economic Analyst at Globicus International, Inc., a New York-based company specializing in macroeconomics and financial markets, Winnie oversaw the company’s business operations, managed financial and economic data, and wrote daily reports on macroeconomics and financial markets. Prior to working at Globicus, she was Investment Promotion Officer at the New York Office of the Thailand Board of Investment (BOI) where she wrote monthly reports on the U.S. economic outlook, wrote reports on the outlook of key U.S. industries, and assisted investors on doing business and investment in Thailand. Prior to joining the BOI, she was Adjunct Professor teaching International Political Economy/International Relations at the City College of New York. Prior to her teaching experience at the CCNY, Winnie successfully completed internships at the United Nations. Winnie holds an MA Degree from Long Island University, New York. She also did graduate studies at Columbia University in the City of New York and doctoral requirements at the Graduate Center of the City University of New York. Her areas of specialization are international political economy, macroeconomics, financial markets, political economy, international relations, and business development/business strategy. Her regional specialization includes, but not limited to, Southeast Asia and East Asia. Winnie is bilingual in English and Thai with competency in French. She loves to travel (~30 countries) to better understand each country’s unique economy, fascinating culture and people as well as the global economy as a whole.
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