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Economy in Brief

U.S. Factory Orders Slip; Inventories Strengthen
by Tom Moeller  December 4, 2017

Manufacturing sector orders eased 0.1% following a 1.7% September rise, initially reported as 1.4%. Durable goods orders declined 0.8% (+3.2% y/y), revised from the advance estimate of a 1.2% drop. Transportation sector orders fell 4.2% (-7.6% y/y) as commercial aircraft bookings were off 18.5%. Orders outside of the transportation sector rose 0.8% (8.1% y/y) following a 1.1% jump. Computer & electronic product orders increased 0.7% (8.1% y/y). Machinery orders improved 1.9% (13.0% y/y), while electrical equipment and appliance orders gained 0.8% (2.8% y/y).

Total factory sector shipments gained 0.6% (7.4% y/y) after a 1.1% jump. Durable goods shipments rose 0.4% (7.5% y/y). Transportation equipment shipments eased 0.4% (+4.9% y/y). Auto shipments fell 2.8% (-7.5% y/y) while light truck shipments improved 4.2% (10.2% y/y). Civilian aircraft shipments fell 12.4% (-11.0% y/y). Excluding the transportation sector, shipments rose 0.8% (7.8% y/y). Shipments of machinery improved 0.9% (12.3% y/y) while computer & electronic product shipments gained 0.4% (4.7% y/y).

Nondurable goods shipments (which equal orders) rose 0.7% (7.2% y/y). The value of petroleum refinery shipments increased 2.7% (23.9% y/y) with higher prices. Basic chemical shipments improved 0.5% (4.7% y/y) for a second straight month, and textile product shipments eased 0.3% (+0.9% y/y). Shipments of apparel rose 0.7% (6.9% y/y), while food product shipments were little-changed (+5.9% y/y).

Unfilled orders were fairly steady (0.5% y/y) following a 0.3% rise. Outside of the transportation sector, unfilled orders rose 0.5% (4.5% y/y). Durable goods backlogs also were little-changed (0.5% y/y) as unfilled orders for computers & electronic products rose 0.6% (2.8% y/y). Unfilled orders of machinery gained 0.2% (3.8% y/y) and backlogs of furniture & related products held steady (1.2% y/y).

Inventories at the factory level rose 0.2% (3.7% y/y) in October. Outside of the transportation sector, inventories increased 0.2% (4.7% y/y). Durable goods inventories gained 0.2% (3.7% y/y). Fabricated metals inventories strengthened 0.3% (5.6% y/y) after two straight months of 0.6% increase. Machinery inventories eased 0.2% (+6.1% y/y) while inventories of computers & electronic products held steady (4.1% y/y). Nondurable goods inventories improved 0.2% (3.7% y/y) after two months of 0.7% increase. The value of petroleum refinery inventories rose 0.3% (23.1% y/y) following three straight months of strong increase. Apparel inventories declined 1.2% (-5.3% y/y), and food product inventories eased 0.8% (+0.8% y/y). Textile product inventories fell 0.3% (+4.0% y/y).

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

Factory Sector- NAICS Classification (%) Oct Sep Aug Oct Y/Y 2016 2015 2014
New Orders -0.1 1.7 1.2 5.2 -1.9 -7.7 1.8
Shipments 0.6 1.1 0.6 7.4 -1.8 -5.8 1.3
Unfilled Orders -0.0 0.3 -0.0 0.5 -1.9 -2.0 8.4
Inventories 0.2 0.6 0.6 3.7 0.7 0.0 1.7
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