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Economy in Brief

U.S. Factory Orders Remain Strong
by Tom Moeller  November 6, 2017

Manufacturing sector orders increased 1.4% during September (5.3% y/y) following an unrevised 1.2% August gain. Durable goods orders rose 2.0% (5.9% y/y), revised from the advance estimate of a 2.2% gain which followed a 2.1% August rise. Transportation sector orders improved 4.7% (4.7% y/y) for the second straight month. Commercial aircraft bookings repeated a roughly one-third m/m gain. Orders outside of the transportation sector rose 0.7% (5.5% y/y). Computer & electronic product orders strengthened 1.9% (7.9% y/y). Machinery orders ticked 0.1% higher (6.3% y/y), while electrical equipment and appliance orders rose 0.7% (-1.4% y/y).

Total factory sector shipments gained 0.8% (4.0% y/y), the strongest increase in nine months. Durable goods shipments rose 0.9% (3.3% y/y). Transportation equipment shipments improved 1.1% (-1.3% y/y). Auto shipments fell 1.2% (-10.7% y/y) while light truck shipments improved 0.2% (-0.1% y/y). Civilian aircraft shipments rebounded 8.5% (-1.2% y/y) following a steep August drop. Excluding the transportation sector, shipments rose 0.8% (5.1% y/y). Shipments of machinery improved 1.6% (6.9% y/y) while computer & electronic product shipments gained 1.0% (6.5% y/y) for the second straight month.

Nondurable goods shipments (which equal orders) rose 0.8% (4.7% y/y). The value of petroleum refinery shipments jumped 5.3% (24.3% y/y) with higher prices. Basic chemical shipments improved 0.2% (0.4% y/y) and textile product shipments recovered 1.2% (1.8% y/y). Shipments of apparel fell 0.8% (+1.1% y/y), down for the second straight month, while food product shipments eased 0.1% (+5.5% y/y).

Unfilled orders increased 0.2% (+1.4% y/y) following three straight months of decline. Outside of the transportation sector, unfilled orders rose 0.4% (4.4% y/y) for a second consecutive month. Durable goods backlogs rose 0.2% (1.2% y/y) as unfilled orders for computers & electronic products rose 0.5% (2.8% y/y). Unfilled orders for machinery eased 0.2% (+3.5% y/y) and backlogs for those furniture & related products fell 0.5% (+2.2% y/y), down for a second straight month.

Inventories at the factory level rose 0.7% (3.7% y/y) in September. Outside of the transportation sector, inventories increased 0.7% (4.6% y/y) for a second consecutive month. Durable goods inventories gained 0.6% (3.6% y/y). Fabricated metals inventories strengthened 0.7% (5.3% y/y) about as they have for three straight months. Machinery inventories increased 0.8% (5.9% y/y) while inventories of computers & electronic products rose 0.6% (3.8% y/y). Nondurable goods inventories improved 0.7% (4.0% y/y) for the second straight month. The value of petroleum refinery inventories increased 5.5% (27.1% y/y). Apparel inventories rose 2.6% (1.2% y/y), but food product inventories eased 0.1% (+1.3% y/y). Textile product inventories gained 0.1% (4.0% y/y).

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

Factory Sector- NAICS Classification (%) Sep Aug Jul Sep Y/Y 2016 2015 2014
New Orders 1.4 1.2 -3.3 5.3 -1.9 -7.7 1.8
Shipments 0.8 0.6 0.2 4.0 -1.8 -5.8 1.3
Unfilled Orders 0.2 -0.0 -0.3 1.4 -1.9 -2.0 8.4
Inventories 0.7 0.6 0.4 3.7 0.7 0.0 1.7
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