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Economy in Brief

U.S. Factory Sector's New Orders Backpedal
by Tom Moeller  January 6, 2016

New orders in the manufacturing sector fell 0.2% during November (-3.5% y/y) following a 1.3% October increase, revised from 1.5%. The decline compared to expectations for a 0.1% increase in the Action Economics Forecast Survey. The shortfall reflected little change (+2.3% y/y) in durable goods orders which were unrevised from the advance report. The figure contained a 22.2% decline (-10.4% y/y) in nondefense aircraft & parts orders. Factory sector orders excluding the transportation altogether eased 0.3% (-5.7% y/y) following a 0.1% gain. Orders for nondurable goods (which equal shipments) fell 0.4% (-8.7% y/y), off for the fifth straight month. A 1.7% decline (-36.1% y/y) in shipments from petroleum refineries was the fifth consecutive drop as prices fell. Also dipping by 0.2% (-1.8% y/y) were food product shipments. Basic chemical shipments eased 0.2% (+1.1% y/y). Apparel shipments rebounded 1.1% but they were up negligibly versus last year. Durable goods shipments recovered 0.8% (3.2% y/y), led by a 0.9% increase (9.3% y/y) in computers.

Unfilled orders in the manufacturing sector increased 0.2% (-2.2% y/y). Transportation sector backlogs rose 0.2% (-2.4% y/y), despite a 0.4% fall (-1.8% y/y) in nondefense aircraft & parts. Outside of the transportation sector, backlogs improved 0.2% (-2.0% y/y). Electrical equipment backlogs fell 0.6% (-4.7% y/y), the eighth decline in as many months. Computer & electronic product backlogs gained 0.7% (5.7% y/y).

Factory sector inventories fell 0.3% (-2.3% y/y), about as they have during the last five months. Outside of the transportation sector, inventories were off 0.1% (-3.2% y/y), off for the fifth consecutive month. Primary metals inventories fell 1.2% (-10.4% y/y) and machinery inventories eased 0.1% (-1.4% y/y). Electrical equipment & appliance inventories declined 0.2% (-1.3% y/y) while computer & electronic product inventories fell 0.4% (+0.1% y/y).

The factory sector figures are available in Haver's USECON database. The expectations figure from the Action Economics Forecast Survey is available in AS1REPNA.

Factory Sector- NAICS Classification (%) Nov Oct Sep Y/Y 2014 2013 2012
New Orders -0.2 1.3 -0.8 -3.5 3.5 2.0 4.7
Shipments 0.2 -0.7 -0.3 -3.1 2.6 1.9 4.7
Unfilled Orders 0.2 0.3 -0.5 -2.2 11.5 6.5 7.8
Inventories -0.3 -0.2 -0.5 -2.3 2.4 1.7 3.8
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