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Economy in Brief

U.S. Factory Orders Increase Sharply
by Tom Moeller  August 3, 2017

Manufacturing sector orders jumped 3.0% in June (9.1% y/y) following a 0.3% May dip, revised from -0.8%. Durable goods orders strengthened 6.4% (14.8% y/y), revised from 6.5% in the advance report. Transportation sector orders strengthened 19.0% (32.1% y/y) with a surge in aircraft bookings. Orders outside of the transportation sector eased 0.2% (+4.6% y/y). Computer & electronic product orders slipped 0.2% (-0.7% y/y). Machinery orders improved 0.4% (10.6% y/y), but electrical equipment orders fell 2.1% (+0.1% y/y).

Total factory sector shipments declined 0.2% (4.0% y/y), and have been little changed so far this year. Durable goods shipments held steady (4.4% y/y). Transportation equipment shipments eased 0.5% (+2.1% y/y). Auto shipments declined 4.4% (-14.5% y/y) while light truck shipments increased 0.2% (10.4% y/y). Nondefense aircraft shipments strengthened 0.9% (-2.5% y/y). Excluding the transportation sector, shipments have been fairly stable for the last four months (+4.4% y/y). Shipments of machinery also were steady in June (5.5% y/y) while computer & electronic product shipments rose 0.7% (3.9% y/y).

Nondurable goods shipments (which equal orders) fell 0.3% (+3.6% y/y). The value of petroleum refinery shipments declined 2.8% (+9.6% y/y) with lower prices. Basic chemical shipments rose 0.5% (1.4% y/y), and textile product shipments rose 0.5% (3.6% y/y). Shipments of apparel strengthened 1.4% (10.3% y/y) while food product shipments slipped 0.2% (+5.8% y/y).

Unfilled orders jumped 1.3% (0.7% y/y) with the surge in aircraft backlogs. Outside of the transportation sector, unfilled orders declined 0.4% (+3.6% y/y). Electrical equipment & appliance backlogs fell 0.4% (+11.7% y/y). Computer & electronic product backlogs inched 0.1% higher (2.6% y/y), and have been fairly stable all year. Unfilled orders for machinery increased 0.9% (3.4% y/y).

Inventories at the factory level rose 0.2% (2.3% y/y) in June. Outside of the transportation sector, inventories also rose 0.2% (3.1% y/y). Durable goods inventories gained 0.5% (2.4% y/y). Fabricated metals inventories jumped 1.0% (3.5% y/y). Machinery inventories strengthened 1.3% (4.3% y/y), while inventories of computers & electronic products rose 0.3% (2.4% y/y) for a second month. Nondurable goods inventories declined 0.3% (+2.0% y/y) as apparel inventories fell 0.8% (-7.5% y/y). The value of petroleum refinery inventories was off 3.7% (+8.7% y/y), the fourth consecutive month of sharp decline.

The factory sector figures are available in Haver's USECON database.

Factory Sector- NAICS Classification (%) Jun May Apr Jun Y/Y 2016 2015 2014
New Orders 3.0 -0.3 -0.3 9.1 -1.9 -7.7 1.8
Shipments -0.2 0.3 0.0 4.0 -1.8 -5.8 1.3
Unfilled Orders 1.3 -0.1 0.2 0.7 -1.9 -2.0 8.4
Inventories 0.2 -0.2 0.0 2.3 0.7 0.0 1.7
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