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Economy in Brief

U.S. Factory Orders Backpedal in May
by Tom Moeller  July 5, 2016

New orders to manufacturers declined 1.0% (-0.2% y/y) during May following a little-revised 1.8% April gain. A 0.9% decline had been expected in the Action Economics Forecast Survey. Durable goods orders fell 2.3%, which was roughly the same as in the advance report, and paced by a sharp drop in transportation sector bookings.

Nondurable goods orders, which equal shipments, improved 0.3% (-4.6% y/y) led by a steady 2.4% increase (-30.7% y/y) in petroleum refinery shipments. Apparel shipments jumped 1.9% (13.6% y/y), but basic chemical shipments were off 0.5% (+3.9% y/y). Durable goods shipments eased 0.2% (+0.2% y/y) led lower by fewer motor vehicle shipments.

Unfilled orders gained 0.2% (-0.9% y/y) as durable goods backlogs increased 0.2% (-0.9% y/y), which was only the second gain this year. The rise was led by a 0.7% increase (5.9% y/y) in computers & electronic products, but electrical equipment backlogs eased 0.3% (+2.5% y/y).

Inventories of manufactured products fell 0.1%, and have been declining steadily since late in 2014. Transportation equipment inventories fell 0.3% (-0.2% y/y). Outside of the transportation sector, inventories eased 0.1% (-3.8% y/y). Electrical equipment inventories remained unchanged (-2.5% y/y). Inventories on nondurable goods improved 0.1% (-4.0% y/y), but there was a one-third y/y drop in the value of petroleum refinery inventories.

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 (%) May Apr Mar Y/Y 2015 2014 2013
New Orders -1.0 1.8 1.7 -0.2 -6.3 1.8 2.0
Shipments 0.0 0.4 0.3 -3.2 -4.4 1.2 2.0
Unfilled Orders 0.2 0.6 0.0 -0.9 -2.4 8.8 5.8t
Inventories -0.1 -0.1 -0.1 -3.1 -2.5 1.8 0.9
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