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Economy in Brief

U.S. Factory Orders Improve; Shipments Decline
by Tom Moeller  September 2, 2016

Manufacturing sector orders increased 1.9% (-3.5% y/y) during July and reversed the prior month's 1.8% fall, revised from -1.5%. The rise reflected a 4.4% increase in orders for durable goods, which was unrevised from the advance report. A near-doubling of civilian aircraft orders paced durables' rise followed by a 20.9% jump in defense aircraft orders. Outside of transportation, orders gained 0.2% (-2.6% y/y). Computer orders rose 3.4% (3.1% y/y) and machinery bookings gained 1.4% (-5.5% y/y). Orders for nondurable goods, which equal shipments, eased 0.5% (-3.7% y/y). A 4.8% decline (-25.4% y/y) in petroleum shipments led the way lower. The value of textile product shipments improved 0.2% (-3.3% y/y) and apparel shipments gained 0.4% (6.7% y/y). Basic chemical product shipments fell 0.2% (+0.4% y/y).

Shipments of durable goods improved 0.1% (-2.3% y/y), held back by a 1.0% decline in (-7.7% y/y) in machinery shipments. This decline was offset by a 1.7% rise (3.9% y/y) in shipments of computers & electronic products. Shipments of electrical equipment & appliances also rose 0.7% (-7.2% y/y).    

Unfilled orders eased 0.1% (-2.2% y/y). Outside of the transportation sector, order backlogs increased 0.3% (+0.1% y/y). Machinery backlogs gained 0.1% (-6.8% y/y), and transportation sector backlogs fell 0.3% (-3.2% y/y). Computer & electronic product unfilled orders rose 0.5% (5.7% y/y).

Inventories of manufactured products rose 0.1% (-2.9% y/y). Outside of transportation they also ticked 0.1% higher. Durable goods inventories rose 0.4% (-2.6% y/y). Transportation sector inventories gained 0.4% (-1.3% y/y) and electrical equipment inventories rose 0.9% (-2.8% y/y). Computer & electronic product inventories declined 0.5% (-2.2% y/y). Nondurable goods inventories eased 0.2% (-3.5% y/y) as the value of petroleum inventories fell 2.3% (-31.3% y/y) with lower prices. Basic chemical inventories gained 0.2% (0.7% y/y) and apparel inventories rose 0.3% (9.2% 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 (%) Jul Jun May Jul Y/Y 2015 2014 2013
New Orders 1.9 -1.8 -1.2 -3.5 -6.3 1.8 2.0
Shipments -0.2 0.6 0.1 -3.0 -4.4 1.2 2.0
Unfilled Orders -0.1 -0.9 0.0 -2.2 -2.4 8.8 5.8t
Inventories 0.1 -0.0 -0.1 -2.9 -2.5 1.8 0.9
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