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Economy in Brief

U.S. Factory Orders, Shipments and Inventories Increase in November
by Tom Moeller  January 6, 2021

• Factory orders and shipments remain strong.

• Inventory accumulation accelerates.

• Order backlogs continue to decline.

Manufacturing activity continues to strengthen. Factory orders rose in November for a seventh consecutive month. The 1.0% increase (-0.4% y/y) followed a 1.3% October rise, revised from 1.0%. A 0.8% November increase had been expected in the Action Economics Forecast Survey.

Durable goods orders rose 1.0% (3.9% y/y), which was revised from the 0.9% gain reported two weeks ago. Transportation sector orders increased 2.1% (2.0% y/y) as nondefense aircraft orders surged. Machinery orders strengthened 1.2% (1.3% y/y) while electrical equipment & appliance orders gained 0.7% (-0.1% y/y). The full report on durable goods activity is available here.

Nondurable goods orders, which equal shipments, surged 1.1% (-4.4% y/y) after rising 0.8% during October. Shipments from petroleum refineries surged 4.7% (-27.8% y/y) as oil prices rose. Among other nondurable goods sectors, basic chemical shipments rose 1.5% (3.4% y/y) while paper product shipments gained 0.6% (3.7% y/y). Textile mill shipments improved 0.4% (-2.6% y/y) while apparel shipments edged 0.1% higher (-2.8% y/y).

Shipments of durable goods improved 0.3% (1.0% y/y) following a 1.5% jump. Transportation product shipments rose 0.4% (-1.3% y/y) but nondefense aircraft shipments fell 31.9% (-56.2% y/y). Shipments of computers & electronic products fell 1.4% (+8.2% y/y).

Inventories of manufactured products rose 0.7% in November (-0.7% y/y). Durable goods inventories increased 0.9% (1.1% y/y) while nondurable goods inventories rose 0.5% (-3.4% y/y). Petroleum refinery inventories rose 3.5% (-23.0% y/y) while textile mill inventories gained 0.7% (-5.3% y/y). Food product inventories rose 0.3% (-0.3% y/y), but basic chemical inventories slipped 0.1% (+0.9% y/y).

Unfilled orders eased 0.1% (-6.1% y/y) and have been falling all year. Durable goods backlogs declined 0.1% (-6.1% y/y) as unfilled orders in the transportation sector fell 0.5% (-10.0% y/y). This decline was offset by a 1.0% rise (6.1% y/y) in unfilled orders for electrical equipment & appliances.

All these factory sector figures and West Texas intermediate oil prices are available in Haver's USECON database.

Factory Sector (% chg) - NAICS Classification Nov Oct Sep Nov Y/Y 2019 2018 2017
New Orders 1.0 1.3 1.3 -0.4 -0.1 6.8 5.9
Shipments 0.7 1.2 0.5 -1.3 1.0 6.6 4.7
Unfilled Orders -0.1 -0.2 -0.2 -6.1 -1.8 3.9 2.8
Inventories 0.7 0.3 -0.1 -0.7 2.8 3.6 4.2
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