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Economy in Brief

U.S. Factory Orders Rebound; Shipments & Inventories Firm in November
by Carol Stone, CBE  January 5, 2018

Manufacturers' orders gained 1.3% in November (8.6% y/y) following a 0.4% rise in October; this earlier number was revised from a 0.1% decrease initially reported. Durable goods orders were also up 1.3% (8.2% y/y); they had fallen 0.4% in October. The upturn was in the transportation sector, where November new orders gained 4.1% (10.1% y/y), reversing a 4.0% drop in October. That swing took place in the nondefense aircraft sector; those orders had dropped 15.8% in October but came back 14.7% in November (110.2% y/y). Orders outside the transportation sector rose 0.8% (7.6% y/y) following a 1.2% jump. Most of that move came in the nondurable goods segment, up 1.4% (8.1% y/y); see the shipments discussion below for more detail. Among durable goods, orders for electrical equipment were up 0.6% (1.1% y/y) in November after 1.1% the month before. Other main sectors had declines, especially computer & electronic products, 0.5% (14.3% y/y), easing after a 1.6% gain in October Orders for machinery fell 1.0% in November (10.4% y/y), also reversing a sizable October rise, 2.8%.

Total factory sector shipments rose 1.2% (7.8% y/y) in November after an 0.8% increase. Durable goods shipments increased 0.9% (7.5% y/y). Transportation equipment shipments jumped 2.6% (6.9% y/y) as nondefense aircraft rebounded 11.9% (10.8% y/y) after October's 12.2% drop. Auto shipments came back 1.1% (-6.8% y/y) after a 2.6% fall. Light truck shipments extended their 4.8% October gain, going up 1.8% in November (13.5% y/y). Excluding the transportation sector, shipments rose 0.9% (7.9% y/y). Those of computer & electronic products gained 0.5% (6.78% y/y), but machinery shipment fell 0.3% (10.3% y/y).

Nondurable goods shipments happen within the same reporting period as orders, and the series are equal. As noted above, these orders/shipments rose 1.4% in November. The value of petroleum refinery shipments increased 6.3% (36.6% y/y) as oil prices continued to rise. Basic chemical shipments were up 1.6% (4.2% y/y), improving on a 1.1% October advance. Textile products and apparel both gained 1.7% in November; textiles were up 5.9% y/y and apparel 6.7% y/y. Food product shipments fell 0.9% (+3.9% y/y)

Unfilled orders edged higher 0.1% (0.57% y/y) in November, following a similar 0.1% rise the month before. Outside the transportation sector, unfilled orders rose 0.5% (4.6% y/y); unfilled orders for the whole manufacturing sector are identical to those for durable goods, since orders and shipments for nondurable goods are seen as equal. Transportation backlogs decreased 0.1% (-1.0% y/y) after a 0.2% decrease in October. Other durable goods sectors saw backlogs up 0.5% (4.6% y/y) with furniture up 0.8% (2.1% y/y), computers, 0.3% (3.4% y/y) and machinery, 0.2% (4.1% y/y).

Inventories at the factory level rose 0.6% (3.7% y/y) in November, modestly firmer than October's 0.3% increase. Outside the transportation sector, they were up 0.5% (4.9% y/y) in November. Durable goods inventories gained 0.2% (3.5% y/y), the same as in October. Fabricated metals inventories strengthened 0.4% (6.1% y/y). Machinery inventories rose 0.2% (+5.5% y/y), reversing a 0.1% dip in October. Inventories of computers & electronic products picked up 0.5% (4.2% y/y). Nondurable goods inventories grew 0.6% (4.1% y/y) in November, equaling October's 0.6% rise. The value of petroleum refinery inventories rose 2.9% (24.0% y/y), again reflecting oil price increases. Apparel inventories fell 0.4% (-4.6% y/y) and textile product stocks were unchanged (3.0% y/y). Food product inventories edged down 0.1% (+0.7% y/y).

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

Factory Sector- NAICS Classification (%) Nov Oct Sep Nov Y/Y 2016 2015 2014
New Orders 1.3 0.4 1.7 8.6 -1.9 -7.7 1.8
Shipments 1.2 0.8 1.1 7.8 -1.8 -5.8 1.3
Unfilled Orders 0.1 0.1 0.3 0.7 -1.9 -2.0 8.4
Inventories 0.4 0.3 0.6 3.7 0.7 0.0 1.7
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