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Economy in Brief
U.S. Housing Affordability Declines Further in June
The NAR Fixed Rate Mortgage Housing Affordability Index fell 3.6% in June...
EMU Output Makes Solid Gain in June
The European Monetary Union posted a 0.7% increase for industrial output in June...
U.S. Producer Prices Fall During July; Core Increase Weakens
The Producer Price Index for Final Demand fell 0.5% during July...
U.S. Unemployment Claims Continue on an Uptrend
Initial claims for unemployment insurance filed in the week ended August 6 rose 14,000 to 262,000...
RICS Survey Points to More U.K. Housing Sector Weakness
The survey of housing market conditions in the U.K. continues to show strength in prices versus weakness...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Sandy Batten January 7, 2020
Factory orders decreased 0.7% m/m (-1.5% y/y) in November following a slightly downwardly revised 0.2% m/m increase in October (initially reported as +0.3% m/m). This was the third monthly decline in the past four months. The November weakness had been generally expected after the advance report on durable goods orders released previously, which showed a 2.0% m/m decline in those orders. The Action Economics Forecast Survey had looked for a 0.8% m/m decline in total orders in November. The initially reported 2.0% m/m decline in orders for durable goods was revised down slightly to -2.1% m/m. A 35.5% m/m plunge in orders for aircraft was a leading factor behind the November decline in both factory and durables goods orders. Total orders excluding transportation were up 0.3% m/m in November, led by increases in orders for electrical equipment (+2.0% m/m), furniture (+1.0% m/m) and nondurable goods (the new information in this report, which rose 0.6% m/m).
Total shipments rose 0.3% m/m (-0.8% y/y) in November following a modest 0.1% m/m increase in October, which followed three consecutive monthly declines. Shipments of durable goods were unchanged in November while shipments of nondurable goods (which equals orders) rose a solid 0.6% m/m (0.9% y/y) on top of a 0.3% m/m rise in October. However, the November increase was not widely spread, but rather was concentrated in a 2.7% m/m increase in orders for petroleum products that accounted for 88% of the increase in nondurable shipments/orders. Shipments fell in six of the ten major categories.
Unfilled orders in the factory sector fell 0.4% m/m (-2.0% y/y) in November after having been unchanged in October. All unfilled orders are for durable goods. Almost all of the November decline in overall unfilled orders was due a 0.6% m/m drop in unfilled transportation orders (largely unfilled defense aircraft orders, -2.6% m/m).
Total factory inventories increased 0.3% m/m (+2.7% y/y) in November for the third consecutive monthly increase. Inventories of durable goods rose 0.4% m/m while inventories of nondurable goods edged up 0.1% m/m. This was the fifteenth consecutive monthly increase in durable goods inventories. The November increase in durables inventories was led by a 1.9% m/m jump in inventories of nondefense aircraft and parts. November nondurables inventories was dominated by a 2.2% increase in inventories at petroleum refineries.
The factory sector figures are available in Haver's USECON database. The expectation figure is in the AS1REPNA database.
Factory Sector (% chg) - NAICS Classification | Nov | Oct | Sep | Nov Y/Y | 2018 | 2017 | 2016 |
---|---|---|---|---|---|---|---|
New Orders | -0.7 | 0.2 | -0.8 | -1.5 | 7.3 | 5.7 | -2.9 |
Shipments | 0.3 | 0.1 | -0.4 | -0.8 | 6.9 | 5.0 | -3.2 |
Unfilled Orders | -0.4 | 0.0 | 0.0 | -2.0 | 3.9 | 1.9 | -1.1 |
Inventories | 0.3 | 0.2 | 0.3 | 2.7 | 3.5 | 4.5 | -0.7 |