Tom Moeller

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Job growth remains on a slower, but steady path. Nonfarm private sector payrolls increased 208,000 (3.6% y/y) during September following a 185,000 August rise, revised from 132,000 reported last month. Growth during the last two months together averaged 196,000, the weakest gain since February 2021. The Action Economics Forecast Survey expected a 200,000 September rise.

Small businesses (1-49 employees) added 58,000 job (1.8% y/y) following a 28,000 August increase. The 43,000-average gain during the last two months compared to 117,000 as of June. Employment at firms with (50-499 employees) rose 90,000 (4.3% y/y) after an 81,000 August gain. Averaging just 86,000 over the last two months, growth was down from 312,000 as of April. Employment at large firms (500+ employees) rose 60,000 (9.6% y/y) last month after a 76,000 August rise. Recent gains followed a 2,000 decline as of June.

By industry group, goods-producing employment declined 29,000 (+2.4% y/y) after falling 15,000 in August. Factory sector jobs declined 13,000 (+1.8% y/y) after increasing 2,000 in August while construction employment held steady (+3.7% y/y) following an 8,000 decline.

Service-producing jobs rose 237,000 following a 200,000 increase. Annual growth of 3.8% compares to a 4.9% high as of April. Trade, transportation & utilities payrolls rose 147,000 (2.8% y/y) while professional & business services employment improved 57,000 (4.9% y/y). Education & health care employment rose 38,000 (0.9% y/y) and leisure & hospitality job increased 31,000 (9.4% y/y). To the downside, information jobs fell 19,000 (+3.3% y/y), off for the second straight month while the number of financial activities jobs were off 16,000 (-0.3% y/y), down for the third straight month.

By Census region, employment in the South again posted the largest gain of the four major regions, up 89,000 (3.9% y/y) after rising 95,000 in August. Jobs in the West repeated their August gain and rose 55,000 (4.3% y/y). Employment in the Northeast rose 39,000 in September (3.2% y/y) following a 10,000 gain in August. A 25,000 increase (2.4% y/y) in employment in the Midwest repeated the August gain.

Median annual pay is reported monthly with breakdowns by worker type, gender, age, industry and firm size. The annual rate of increase in pay for "job stayers" was an improved 7.8% y/y in September. That remained up from 1.6% in March of last year. By gender, female median pay rose 8.1% y/y compared to 7.6% for men. Pay gains have been fastest in the 16-24 year ago group (15.3% y/y) followed by 11.3% in the 25-34 bracket. Earnings in the 35-54 age group rose 7.6% y/y and 5.2% in the 55-85 age bracket.

The ADP National Employment Report and Pay Insights data can be found in Haver's **USECON** database. Historical figures date back to January 2010 for private employment. Pay data date back to October 2020. The expectation figure is available in Haver's **AS1REPNA** database.

- Recent months' gains weaken versus early-2022.
- Hiring at medium-sized company leads softening.
- Pay gains remain firm.

ADP Employment Gain Is Moderate in September

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Total factory orders remained fairly steady (11.2% y/y) in August after falling an unrevised 1.0% during July. The latest figure was as expected in the Action Economics Forecast Survey. Shipments excluding the transportation sector rose 0.2% (10.5% y/y) following a 1.1% July decline.

Durable goods orders slipped 0.2% (+8.8% y/y) in August after easing 0.1% in July. The decline matched the figure in the advance report issued last week. The decline reflected a 1.1% drop (+14.7% y/y) in orders for transportation equipment, pulled down by an outsized drop in commercial aircraft orders. Orders for furniture & related products weakened 0.8% (+1.7% y/y) and fabricated metals orders fell 0.7% (3.7% y/y). To the upside, primary metals orders rose 0.6% (6.5% y/y). Electrical equipment, appliances & components increased 1.6% (9.1% y/y), accompanied by a 0.3% rise (7.3% y/y) in machinery orders. Orders for computers electronic products rose 0.7% (6.2% y/y).

Total shipments rose 0.5% (12.2% y/y) in August after falling 0.9% in July. Excluding transportation, shipments improved 0.2% (11.4% y/y) following a 1.3% July decline. Shipments of durable goods rose 0.8% (10.8% y/y). Shipments of electrical equipment & appliances strengthened 2.5% (10.4% y/y) and transportation equipment shipments rose 2.0% (16.5% y/y). Shipments of primary metals improved 0.3% (7.1% y/y) while shipments of computers & electronic products gained 0.4% (8.1% y/y).

Nondurable goods shipments, which equal nondurable goods orders, rose 0.2% (13.6% y/y) in August after falling 1.9% in July. The rise was led by basic chemical shipments which rose 0.9% (6.3% y/y) while plastic & rubber product shipments gained 0.7% (7.8% y/y). Paper product shipments improved 0.2% (2.0% y/y) while shipments of food products improved 0.1% (4.9% y/y). These gains were offset by a 1.1% weakening (+45.9% y/y) in shipments of petroleum & coal products. Apparel shipments declined 1.4% and were unchanged y/y.

Unfilled orders rose 0.5% (6.9% y/y) in August after a 0.7% increase in July. Excluding transportation, unfilled orders rose 0.3% (5.2% y/y), the same as in July. The August gain in unfilled orders was led by 1.0% rise (12.5% y/y) in electrical equipment, appliances & components. Transportation equipment backlogs rose 0.6% (8.1% y/y) but those of furniture & related products fell 0.6% (-1.6% y/y). Machinery backlogs rose 0.6% (8.4% y/y) and unfilled orders of primary metals gained 0.2% (-0.7% y/y).

Inventories edged 0.1% lower (8.8% y/y) in August after remaining fairly steady in July. Excluding transportation, inventories declined 0.2% (+10.4% y/y) after holding steady in July. Inventories of durable goods rose 0.2% (8.0% y/y), while inventories of nondurable goods fell 0.7% (+10.0% y/y), led by a 6.1% decline (+26.3% y/y) in petroleum & coal inventories.

The factory sector data are available in Haver's **USECON** database. The Action Economics Forecast Survey is in the **AS1REPNA** database.

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- Durable goods orders slip, but nondurables orders rise.
- Shipments rise broadly.
- Unfilled orders increase but inventories dip.

U.S. Factory Orders Hold Steady but Backlogs Rise in August

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Retail gasoline prices increased last week to $3.78 per gallon (+18.6% y/y) from $3.71 during the week before. It was the second increase since the third week of September when the price hit a low of $3.65 per gallon. Prices remained below the mid-June peak of $5.01 per gallon.

The price of West Texas Intermediate crude oil slid to an average $79.79 per barrel (+6.5% y/y) in the week ended September 30. Prices fell from $83.27 in the prior week and are down from a high of $120.46 per barrel in the second week of June. Yesterday, the price rose to $83.63 per barrel. The average price of Brent crude oil weakened to $86.87 per barrel last week (+10.7% y/y) after falling to $88.54 in the previous week. The price peaked at $127.40 in mid-June. Yesterday, the price moved up to $90.68 per barrel.

The price of natural gas also weakened last week to $6.63/mmbtu (+16.7% y/y) from $7.69/mmbtu in the previous week. Prices peaked at $9.56/mmbtu in the last week of August. They remained up from a low of $3.56/mmbtu in the last week of December. Yesterday, the price weakened further to $5.64/mmbtu.

In the four weeks ended September 23, gasoline demand declined 6.6% from a year earlier after falling 7.7% y/y during the prior four weeks. These declines compare to 15.2% y/y growth at the end of last year. Demand for all petroleum products fell 3.1% y/y in the latest four weeks in contrast to the 14.4% growth at the end of 2021. Crude oil input to refineries increased 7.7% y/y, the quickest growth since early April.

Gasoline inventories fell 4.3% y/y in the week of September 23, while crude oil inventories declined 17.7% y/y.

Measured in days' supply, gasoline inventories in the week ended September 16 fell to 24.7 days from 25.1 days in the prior week. The supply of crude oil was steady with the previous week at 26.9 days and remained down from 41.8 days in early-March of last year.

These data are reported by the Energy Information Administration of the U.S. Department of Energy. The price data can be found in Haver's **WEEKLY**and **DAILY** databases. Greater detail on prices, as well as the demand, production and inventory data are in **USENERGY**.

- Gasoline prices rise.
- Crude oil prices continue to fall.
- Natural gas prices decline again.

U.S. Energy Prices Are Mixed

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The Autodata Corporation reported that light vehicle sales during September rose 2.1% (10.4% y/y) to 13.67 million units (SAAR) from 13.39 million in August. Sales remained roughly one-quarter below the April 2021 peak 18.50 million. Vehicle sales comprise about four percent of real consumer expenditures.

Sales of light trucks led last month's increase with a 2.4% gain (10.2% y/y) to 10.71 million units as they recaptured the August shortfall. Purchases of domestically-produced light trucks rose 2.1% last month (13.2% y/y) to 8.23 million units after falling 3.1% in August. Sales of imported light trucks improved 3.3% (1.2% y/y) to 2.48 million after rising 2.1% in August.

Trucks' share of the light vehicle market rose to 78.3% in September but remained down from the 80.4% high in October 2021.

Auto sales rose 1.0% during September (+11.7% y/y) to 2.96 million units, a five-month high, after increasing 3.9% during August. Purchases of domestically-made autos rose 5.0% in September (27.9% y/y) to 2.11 million units following a 3.6% August rise. Sales of imported autos weakened 7.6% (-15.8% y/y) to 0.85 million units and reversed the August increase.

Imports' total share of the U.S. vehicle market eased to 24.4% in last month after rising to 24.8% in August. Imports' share of the passenger car market fell sharply to 28.7% last month and remained down from the September 2021 high of 38.1%. Imports' share of the light truck market rose to 23.2%, a twelve-month high.

U.S. vehicle sales figures can be found in Haver's **USECON** database. Additional detail by manufacturer is in the **INDUSTRY** database.

**Hybrid Working, Commuting Time, and the Coming Long-Term Boom in Home Construction** from the Federal Reserve Bank of Kansas City can be found [here](https://www.kansascityfed.org/research/economic-review/hybrid-working-commuting-time-and-the-coming-long-term-boom-in-home-construction/).

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- Light truck & auto sales both improve slightly.
- Imports' share slips.
- Sales remain constrained as parts shortages limit production

U.S. Light Vehicle Sales Edge Higher During September

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Factory sector activity remains under pressure. The Composite Index of factory sector activity reported by the Institute for Supply Management (ISM) fell during September to 50.9 from an unrevised 52.8 in August. The index remained below the March 2021 peak of 63.7 and stood at the lowest level since May 2020. A reading of 52.0 had been expected in the Action Economics Forecast Survey.

Reversing its August improvement, the new orders index fell to 47.1 last month from 51.3 and stood at the lowest level since May 2020. It remained down from a high of 67.4 in December 2020, with orders contracting for the third month in the last four. A lessened 16.0% (NSA) of industries reported an increase in new orders while a higher 21.2% reported a decline. The employment reading dropped to 48.7 last month from 54.2 in August. Remaining below 50, it also indicated a decline in employment for the fourth month in the last five. A lessened 17.5% of industries reported more hiring while a greatly increased 22.2% reported a decline. Also falling, the supplier delivery index weakened to 52.4 from 55.1 in August and indicated the quickest delivery speeds since December 2019. It stood below the high of 78.8 in May of last year.

Working higher, the inventories index rose to 55.5 and reversed most of their deterioration to 53.1 in August. The production series edged higher to 50.6 last month from 50.4 in August. A fairly steady 17.5% of respondents reported higher production while an increased 18.2% reported a decline.

Pricing power in the factory sector continued to weaken during September. The prices index declined to 51.7 (NSA) from 52.5 in August. It remained the lowest reading since June 2020 and down from a high of 92.1 in June 2021. A greatly lessened 31.4% of respondents reported higher prices while a significantly increased 28.1% reported price declines, compared to virtually none this past March.

In other series, the export reading weakened to 47.8 last month from 49.4 in August and remained below the reading of 57.1 in February. A greatly lessened 9.4% of respondents reported higher exports while the percentage reporting lower exports surged to 13.9%. That was increased from 2.7% in February. The import measure was little changed at 52.6. It remained above a low of 48.7 in May. The orders backlog measure fell sharply to 50.9 and remained down from a high of 70.6 in May of last year.

The ISM figures are based on responses from over 400 manufacturing purchasing executives from 20 industries, which correspond to their contribution to GDP in 50 states. These data are diffusion indexes where a reading above 50 indicates expansion. The figures from the Institute for Supply Management can be found in Haver's **USECON** database; further detail is found in the **SURVEYS** database. The expectations number is available in Haver's **AS1REPNA** database.

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- Composite index falls to lowest level since recession's end.
- New orders & employment decline.
- Pricing power continues to weaken.

U.S. ISM Manufacturing Index Declines Sharply in September

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The consumer exhibited caution with spending last month. The August increase in personal consumption expenditures of 0.4% (8.2% y/y) followed a 0.2% July dip and a 1.2% June surge. A 0.2% increase had been expected in the Action Economics Forecast Survey.

The nominal gain was inflated by prices, which rose 0.3% as measured by the PCE price index. The 0.1% rise (1.8% y/y) in real sending followed a 0.1% July decline. Real spending on durable goods declined 0.4% last month (+2.9% y/y) due to a 0.9% decrease (-2.6% y/y) in furniture & appliance purchases. Real spending on recreational goods & vehicles fell 0.6% (+8.8% y/y) but motor vehicle buying rose 0.5% (1.5% y/y). Real spending on nondurable goods eased 0.1% (-2.2% y/y) as apparel spending was little-changed (-0.3% y/y). Real outlays on gasoline and other energy goods rose 2.1% (-2.0% y/y) but real outlays on "other" goods fell 0.8% (+0.2% y/y). Food & beverage buying eased 0.1% (-5.5% y/y). Spending on consumer services also was subdued last month, posting a 0.2% rise (3.0% y/y) when adjusted for inflation. Real housing & utilities expenditures rose 0.1% (0.8% y/y) while healthcare spending gained 0.4% (1.9% y/y). Recreation services buying edged 0.1% higher (7.2% y/y) when adjusted for higher prices but real expenditures at restaurants & hotels held steady (4.9% y/y).

Inflation generally intensified last month. The PCE chain price index rose 0.3% after easing 0.1% in July. The 6.2% y/y rise was below the 7.0% peak this past June. However, it remained close to the highest rate of price inflation in over 40 years. Last month's increase was held back by a 10.0% decline (+27.7% y/y) in energy prices. Food & beverage prices remained strong and rose 0.8% (12.4% y/y). It was a 0.6% rise (4.9% y/y) in core prices that was the real eye-catcher in the report, matching the 0.6% rise (6.3% y/y) in the core CPI for August. A 0.6% rise (5.0% y/y) in the services price index powered the overall gain, driven by a 1.9% jump (12.1% y/y) in transportation prices. The gain in the durable goods price index wasn't far behind, rising 0.5% (5.3% y/y). These gains were accompanied by a 0.8% decline (+10.6% y/y) in nondurables prices as energy prices moved lower. The overall decline masked a 0.3% rise (5.4% y/y) in apparel prices.

Personal income rose an expected 0.3% (3.9% y/y) during August, the same as in July. The gain reflected a 0.3% rise (8.6% y/y) in wages & salaries, up with continued gains in employment. A 1.2% rise (3.7% y/y) in proprietors' income was offset by a 0.1% slip (+3.9% y/y) in receipts on assets. This reflected no change (3.9% y/y) in dividend income that was accompanied by a 0.2% slip (+3.9% y/y) in interest earnings. Rental income rose 0.4% (10.4% y/y) and personal transfer receipts increased 0.2% (-8.1% y/y). Disposable income rose 0.4% last month (1.5% y/y) while real disposable earnings improved 0.1% (-4.5% y/y).

Similar gains in income and outlays left the personal saving rate unchanged at 3.5% in August. The rate stood at 9.5% last August. The level of personal savings eased slightly m/m but was 62.8% lower y/y.

These figures were revised back through 2017. The personal income and consumption figures are available in Haver's **USECON** database with detail in the **USNA** database. The Action Economics figures are in the **AS1REPNA** database.

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- Spending gain mostly reflects higher prices.
- Income increases, but wage growth slows.
- Prices rise moderately as core inflation surges.

U.S. Personal Spending and Income Increase Moderately in August

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Real GDP growth during Q2'22 was unrevised at -0.6% (+1.8% y/y) after declining an unrevised 1.6% in Q1. The latest figure matched expectations in the Action Economics Forecast Survey. GDP increased at a 2.1% annual rate from 2016 to 2021, up 0.2 percentage points from the earlier estimate.

The Q2 gain in corporate profits after-tax was revised up to 7.4% (7.7% y/y) from 6.1%. Domestic nonfinancial profits rose 7.9% (9.8% y/y). Financial sector earnings declined 9.0% (-10.2% y/y) while foreign sector profits rose 5.8% (21.8% y/y).

Real personal consumption expenditure growth last quarter was revised up to 2.0% (2.4% y/y) from 1.5%. Durable goods outlays fell 2.8% (-3.7% y/y) while nondurable spending declined 2.4% (-1.1% y/y). Services outlays rose 4.6% (4.8% y/y). Business fixed investment growth was revised lower to 0.1% (2.4% y/y). Residential investment declined 17.8% (-7.2% y/y), revised from -16.2%.

Government spending fell 1.6% (-1.3% y/y) last quarter, revised from -1.8%. Federal government spending declined 3.4% (-4.0% y/y), revised from -1.9%. Defense spending rose 1.5% (-3.9% y/y). State & local government spending weakened 0.6% (+0.5% y/y).

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The contribution of inventory investment was revised minimally to a 1.9 percentage point subtraction from GDP growth. The narrowing of the foreign trade deficit added 1.2 percentage points to GDP growth, revised from 1.4 percentage points. Exports grew 13.8% (7.3% y/y) while imports rose 2.3% (11.2% y/y).

The GDP price index was revised higher to 9.0% (7.6% y/y) from 8.9%. This remained the fastest pace of GDP price inflation since Q1'81. The Action Economics Forecast Survey expected no revision. The rise in the PCE price Index was revised to 7.3% (6.6% y/y) from 7.1%. The PCE price index less food & energy increased 4.7% (5.0% y/y), revised from 4.4%, and has risen at about that rate for roughly a year. The nonresidential price index rose 8.5% (6.9% y/y), the largest quarterly increase since Q2'81. The residential investment price index rose 15.2%, both q/q and y/y, revised from a 15.3% gain. The government spending price index rose 11.6% (8.3% y/y), revised from 12.4%.

The GDP figures can be found in Haver's **USECON** and **USNA** databases. **USNA** contains virtually all of the Bureau of Economic Analysis' detail in the national accounts. Both databases include tables of the newly published not seasonally adjusted data. The Action Economics consensus estimates can be found in **AS1REPNA**.

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- Consumer spending revised slightly higher.
- Business spending revised lower.
- Corporate profits increased modestly.
- Price index raised.

U.S. GDP Growth Is Unrevised in Q2'22, Posting Second Straight Quarterly Decline

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The Pending Home Sales Index produced by the National Association of Realtors fell 2.0% (-24.2% y/y) to 88.4 in August following a 0.6% easing in July, revised from -1.0%. The August decline was the ninth in ten months. Pending home sales have fallen 30.9% since the August 2020 high.

Pending home sales declined in most regions in August, except the West where they rose 1.4% (-31.3% y/y), up for the second straight month. Sales were 38.1% below the August 2020 peak. Sales in the South fell 0.9% (-24.2% y/y) after a 1.3% July drop. They were 29.4% below the August 2020 high. Sales in the Northeast fell 3.4% (-19.0% y/y) following a 1.9% July shortfall. Sales were one-third below the August 2020 peak. Sales in the Midwest declined 5.2% (-21.1% y/y) in August after easing 0.5% in July. Sales fell 26.3% from the August 2020 high.

The pending home sales index measures sales at the time the contract for the purchase of an existing home is signed, similar to the Census Bureau's new home sales data. In contrast, the National Association of Realtors' existing home sales data are recorded when the sale is closed, which is usually a couple of months after the sales contract has been signed. In developing the pending home sales index, the NAR found that the level of monthly sales contract activity leads the level of closed existing home sales by about two months.

The series dates back to 2001 and are available in Haver's **PREALTOR** database. Weekly mortgage interest rates from the Mortgage Bankers Association can be found in the **SURVEYW** database.

- Sales are lowest since April 2020.
- Sales decline in most of the country.

U.S. Pending Home Sales Fall Further in August

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The advance estimate of the U.S. international trade deficit in goods narrowed to $87.3 billion in August from $90.2 billion in July. It was the shallowest deficit since last October. The deficit reached a peak of $125.7 billion in March of this year. An $89.0 billion deficit had been expected by the Action Economics Forecast Survey. Exports of goods declined 0.9% during August (+20.8% y/y) while imports fell 1.7% (+13.1% y/y).

The falloff in exports last month reflected an 8.9% drop (+10.7% y/y) in exports of autos & auto parts. Industrial supplies & materials weakened 3.5% (+29.8% y/y). Auto & auto parts exports fell 8.9% (+10.7% y/y). Working higher, nonauto consumer goods exports rose 8.0% (16.0% y/y). Exports of "other" goods surged 4.8% (37.1% y/y). Exports of foods, feeds & beverages gained 0.8% (24.6% y/y) while capital goods exports rose 0.4% (10.7% y/y).

The August import decline was led by a 6.9% drop (+17.7% y/y) in industrial supplies & materials imports. Capital goods imports declined 1.8% (+13.2% y/y) while nonauto consumer goods imports eased 0.2% (+7.9% y/y). To the upside, auto & parts imports gained 3.8% (22.9% y/y) while imports of foods, feeds & beverages rose 2.4% (11.7% y/y). Imports of "other" goods rose 1.0% (-5.9% y/y).

The advance international trade data can be found in Haver's **USECON** database. The expectation figure is from the Action Economics Forecast Survey, which is in **AS1REPNA**.

Remote Work and Housing Demand from the Federal Reserve Bank of San Francisco is available [here](https://www.frbsf.org/wpcontent/uploads/sites/4/el2022-26.pdf).

- Deficit is lowest since October 2021.
- Exports ease for third straight month.
- Imports drop for fourth month in last five.

U.S. Goods Trade Deficit Continues to Narrow in August

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New single-family home sales during August rose 28.8% (-0.1% y/y) to 685,000 (AR) after falling 8.6% to 532,000 in July, revised from 511,000. The Action Economics Forecast Survey expected 500,000 sales in August.

A two-thirds sales increase (-21.9% y/y) in the Northeast to 25,000 led last month's overall rise, following no change in July sales. Home sales in the South jumped 29.4% (10.4% y/y) to 467,000, the highest level this year. Home sales in the West improved 27.5% (-24.0% y/y) to 130,000, the highest level in three months. In the Midwest, sales increased 16.7% (5.0% y/y) to 63,000, recovering most of July's fall.

The median price of a new home declined 6.3% during August (+8.0% y/y) to $436,800 following an 8.9% July gain. The average sales price of a new home weakened 6.3% (+11.0% y/y) to $521,800 following a 19.2% July rise. These sales price data are not seasonally adjusted.

Sales weakness accompanied a 0.4% increase (23.3% y/y) in the number of unsold new homes to a seasonally adjusted 461,000, up from a low of 142,000 in July 2012. The seasonally adjusted months' supply of new homes for sale declined to 8.1 months from 10.4 months in July. The median number of months a new home stayed on the market plunged to a record low of 1.7 months. These figures date back to January 1975.

New home sales activity and prices are available in Haver's **USECON** database. The consensus expectation figure from Action Economics is available in the **AS1REPNA** database.

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- Home sales stand at highest level since March.
- Sales rise throughout country.
- Median sales price declines sharply.

U.S. New Home Sales Rebound in August

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Activity in the factory sector remains firm, despite a 0.2% decline (+8.8% y/y) in new orders for durable goods last month, which wholly reflected a decline in civilian aircraft bookings. It followed a 0.1% July slip which was revised from little change. June orders surged 2.3%. The decline in durable goods orders last month matched expectations in the Action Economics Forecast Survey.

Business investment firmed last month. New orders for nondefense capital goods excluding aircraft surged 1.3% (8.8% y/y) In August after a 0.7% July gain. It was the largest monthly increase since January.

A 1.1% decline (+14.6% y/y) in transportation equipment orders held back the overall change in August orders. It followed a 0.7% fall in July. Motor vehicle & parts orders rose 0.3% (14.2% y/y) during August after holding steady in July. Orders for defense aircraft rebounded 31.2% (41.2% y/y) after falling 45.6%.

Excluding transportation, durable goods orders rose 0.2% during August (6.1% y/y), the same as in July. Electrical equipment & appliance orders rebounded 1.0% (8.1% y/y) after falling 0.6%. Computer & electronic product orders rose 0.8% (6.4% y/y) in August after strengthening 1.5% in July. Machinery orders gained 0.3% (7.4% y/y) after rising 0.5% in each of the prior two months. Primary metals orders rose 0.4% (6.8% y/y) after falling 1.5% in July but fabricated metals orders fell 0.7% (+3.7% y/y) and reversed the July gain.

Shipments of durable goods improved 0.7% (10.8% y/y) last month after two roughly 0.2% gains. Transportation shipments rose 1.9% (16.4% y/y) after rising 1.2% in July. Excluding transportation, shipments rose 0.2% (8.3% y/y) following the 0.3% July decline.

The advance reading of shipments of nondurable goods indicated a rise of 0.1% (+13.5% y/y) last month after falling 1.9% in July. Shipments from all manufacturing industries improved 0.4% (12.1% y/y), after weakening 0.9% in July. Capital goods shipments excluding defense and aircraft rose 0.3% (11.0% y/y) in August after rising 0.6% in July.

Unfilled orders for durable goods gained 0.5% (6.9% y/y) last month after improving 0.7% in July. Unfilled orders are not calculated for nondurable goods.

Durable goods inventories edged up 0.2% (8.0% y/y) in August, the same as in July. Nondurable goods inventories declined 0.7% (+10.1% y/y) after a 0.4% July drop.

The durable goods and nondurable goods data are available in Haver's **USECON** database. The Action Economics consensus forecast figure is in the **AS1REPNA** database.

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- Aircraft orders lead decline; increases elsewhere are broad-based.
- Nondefense capital goods orders less aircraft rise further.
- Order backlogs & inventories increase again.

U.S. Durable Goods Orders Fall in August

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Texas manufacturing activity in September continued to fall, according to the Texas Manufacturing Outlook Survey conducted by the Federal Reserve Bank of Dallas. The general business activity index declined to -17.2 this month from -12.9 in August. It was the fifth consecutive negative reading and remained below the high of 38.1 in April 2021. A roughly steady 12.8% of respondents reported improved business activity in September but an increased 30.0% of respondents reported a worsening. The company outlook index remained negative at -10.7, the seventh straight negative reading. Data were collected from September 13-21 from 89 Texas manufacturers.

Labor market strength continued to wane this month. The employment index eased to 15.0 in September, down from a high of 31.1 in December. A greatly lessened 24.4% of respondents reported more hiring this month while a lessened 9.4% reported fewer hires. The wages & benefits index fell to 36.6 from 45.8 in August. It reached a high of 55.2 six months ago. The hours worked index fell to 8.0 from 14.4, down from a high of 24.5 in July of last year.

Many of the other individual series improved this month. The production index rose to 9.3, its highest level in four months. It nevertheless remained below the March 2021 high of 48.6. An increased 32.6% of respondents reported higher production while a lessened 23.3% reported a decline. The capacity utilization measure also rose. The growth rate of orders improved to -1.7 in September, though it was negative for the fifth straight month and down from a high of 31.6 last April. The unfilled orders index rose to -0.1, negative for the third month in the last four.

Also working higher, the shipments index improved to 7.1 in September, its highest level in four months. It remained below the April 2021 high of 33.5. The delivery times index also increased to 0.9 after its August decline to -3.5. It's been suggesting faster delivery speeds since a reading of 30.2 in April of last year.

On the inflation front, the index for prices received for finished goods fell to 18.1 in September, the lowest reading since January 2021 and down from the March 2022 high of 47.8. A greatly lessened 24.4% of respondents reported higher prices while A raised 6.3% reported a decline. The index of prices paid for raw materials edged up to 37.1 after declining sharply to 34.4 in August. It reached a high of 83.3 last November.

The future general business activity index fell sharply to -22.4 in September, its fifth consecutive negative reading. The future production index rose, however, to 28.3, up from 4.0 in June and the highest level since April. Other indexes of future manufacturing activity such as shipments and employment also improved.

Each index is calculated by subtracting the percentage reporting a decrease from the percentage reporting an increase. When all firms report rising activity, an index will register 100. An index will register -100 when all firms report a decrease. An index will be zero when the number of firms reporting an increase equals the number reporting a decrease. Data for the Texas Manufacturing Outlook, conducted by the Federal Reserve Bank of Dallas, can be found in Haver's **SURVEYS** database.

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- Company outlook remains bleak.
- Employment & wages weaken.
- Pricing power continues to decline.

Texas Manufacturing Activity Index Is Negative Again

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