U.S. Factory Orders Up Marginally in January on Weak Defense Aircraft Orders
Summary
- January factory orders +0.1% m/m (+4.4% y/y); second m/m gain in three months and 7.7% above the Jan. ’24 low.
- Durable goods flat; nondurable goods orders +0.3% m/m; shipments +0.5% m/m.
- Transportation orders -0.8% m/m, led by a 23.8% plunge in defense aircraft orders.
- Unfilled orders +0.8%, the sixth straight m/m rise.
- Inventories +0.1%, the third consecutive m/m increase.
Total factory orders increased a less-than-expected 0.1% m/m in January following a 0.4% decline in December and a 2.7% gain in November, data from the U.S. Census Bureau showed. The Action Economics Forecast Survey had expected a 0.3% m/m January increase. The year-on-year growth rate eased to a three-month-low 4.4% in January from 4.5% in December (+3.2% in January 2025), remaining far below a peak of 39.6% in April 2021. Notably, orders for defense aircraft & parts plunged 23.8% m/m in January following an 11.8% jump in December and a 3.5% increase in November, while orders for nondefense aircraft & parts rose 3.8% after a 22.7% December drop and a 98.2% November surge. Factory orders excluding defense rebounded 0.4% (3.8% y/y), the second m/m gain in three months, following a 0.9% December decline. Factory orders excluding the transportation sector rose 0.4% (1.4% y/y), the third successive m/m rise, after a 0.6% December increase.
Durable goods orders were unchanged (+10.3% y/y) in January after a 0.9% decline in December (matching 0.0% m/m in the advance report on March 13). The flat January reading reflected a 0.8% orders decrease (+20.1% y/y) in transportation equipment after a 4.6% December drop, alongside m/m declines of 0.6% (+7.6% y/y) in electrical equipment, appliances & components and 0.4% (+3.7% y/y) in furniture & related products. Other major durable goods orders categories rose m/m in January, led by a 1.3% gain (8.3% y/y) in computers & electronic products, followed by m/m increases of 0.7% (8.7% y/y) in primary metals, 0.5% (5.8% y/y) in fabricated metal products, and 0.2% (6.1% y/y) in machinery.
Nondurable goods orders, which equal nondurable goods shipments, increased 0.3% (-1.4% y/y) in January following a 0.1% uptick in December and four straight m/m declines. The January m/m rise was led by a 1.3% rebound (-12.8% y/y) in petroleum & coal products, followed by gains of 1.1% (-0.2% y/y) in printing, 1.0% (4.2% y/y) in apparel, 0.6% (2.8% y/y) in textile products, 0.4% (0.0% y/y) in food products, and 0.1% (0.1% y/y) in paper products. To the downside, the following nondurable goods shipments declined m/m in January: textile mills (-2.1%; -1.3% y/y), leather & allied products (-1.2%; -10.2% y/y), beverage & tobacco products (-0.5%; +3.2% y/y), and plastics & rubber products (-0.3%; +0.4% y/y). Meanwhile, shipments for chemical products were virtually unchanged (+3.5% y/y) in January following three consecutive m/m increases.
Total shipments rose 0.5% (2.4% y/y) in January, the third m/m rise in four months, following a 0.7% rebound in December. Excluding transportation, shipments increased 0.4% (1.1% y/y), the fourth m/m gain in five months, after a 0.5% December rise. Shipments of durable goods industries grew 0.6% (6.3% y/y), also up for the fourth time in five months, after a 1.2% December gain. This reflected m/m durable goods shipments rises of 1.6% (6.4% y/y) in computers & electronic products, 1.0% (9.4% y/y) in transportation equipment, 0.9% (3.9% y/y) in nonmetallic mineral products, 0.6% (4.7% y/y) in fabricated metal products, 0.4% (8.6% y/y) in primary metals, 0.3% (4.0% y/y) in electrical equipment, appliances & components, and 0.3% (-3.0% y/y) in wood products. By contrast, durable goods shipments for furniture & related products (-0.7%; +1.4% y/y) and machinery (-0.4%; +6.9% y/y) fell m/m in January, while shipments for miscellaneous durable goods were flat (+2.1% y/y) following six straight m/m gains.
Unfilled orders grew 0.8% (11.1% y/y) in January, the sixth consecutive m/m increase, on top of a 0.9% rise in December. Excluding transportation, unfilled orders rose 0.4% (1.8% y/y), also up for the sixth straight month, after a matching 0.4% December rise. Backlogs of durable goods climbed 0.8% (11.1% y/y) in January, reflecting m/m increases across nearly all categories of durable goods unfilled orders, led by rises of 1.0% (17.4% y/y) in transportation equipment and 0.9% (5.1% y/y) in electrical equipment, appliances & components, partially offset by a flat reading (+2.1% y/y) in primary metals.
Inventories edged up 0.1% (0.8% y/y) in January, the third successive m/m increase, after a 0.1% uptick in December. Excluding transportation, inventories were unchanged (+1.0% y/y) for the second consecutive month. Durable goods inventories grew 0.2% (1.7% y/y) for the fourth straight month, while nondurable goods inventories fell 0.2% (-0.6% y/y), the fourth m/m fall in five months, after a 0.3% December decline.
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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