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Economy in Brief

U.S. Factory Orders Reverse Course
by Tom Moeller  March 6, 2018

Manufacturers' orders declined 1.4% (+6.6% y/y) during January following a 1.8% December rise, revised from 1.7% reported initially. Total factory orders excluding transportation improved 0.4% (6.5% y/y), the weakest rise since June. Durable goods orders slumped 3.6% (+7.0% y/y), revised from -3.7% in the advance report, following a 2.7% gain. Transportation equipment orders cratered 10.0% (+6.9% y/y) due to a 28.4% decline in civilian aircraft bookings. Machinery orders eased 0.4% (+7.4% y/y) after a 0.6% rise. Electrical equipment orders fell 0.6% (+0.1% y/y) following a 2.8% drop, but orders for computers & electronic products rose 0.5% (6.7% y/y) after a 0.2% gain.

Nondurable goods orders, which equal shipments, improved 0.8% (6.2% y/y) after a 0.9% rise. The value of petroleum & coal product shipments surged 3.5% (19.7% y/y) after six consecutive months of strong gain. Shipments of food products improved 0.5% (3.2% y/y) reflecting a 1.5% jump (4.3% y/y) in meat product shipments. Textile product shipments inched 0.1% higher (4.5% y/y) after a 0.8% decline. Apparel shipments jumped 1.4% (2.9% y/y) on the heels of even stronger gains in the prior two months. Basic chemical shipments eased 0.1% (+5.0% y/y) following a 0.6% rise.

Shipments of durable goods improved 0.3% (6.0% y/y) after a 0.5% rise. Machinery shipments were unchanged (8.8% y/y) following a 0.7% strengthening. Computer & electronic product shipments rose 0.7% (4.4% y/y), the strongest rise in three months. Electrical equipment shipments rose 0.9% (4.0% y/y) after a 0.6% rise. Transportation product shipment rose 0.7% (4.4% y/y) reflecting a 0.6% gain in aircraft & parts (-3.2% y/y).

Unfilled orders fell 0.3% (+2.0% y/y) overall, but excluding transportation they rose 0.2% (4.6% y/y). Transportation equipment backlogs fell 0.5% (+0.8% y/y) due to a 2.0% decline in defense products. Unfilled orders of durable goods eased 0.3% (+2.0% y/y) after a 0.6% rise. Machinery backlogs gained 0.2% (4.4% y/y) on the heels of three months of stronger increase. Unfilled orders of computer & electronic products rose 0.1% (2.1% y/y) for the second straight month. Electrical equipment & appliance backlogs declined 1.3% (-0.1% y/y), the first decline in six months.

Inventories of manufactured products rose 0.3% (4.0% y/y) after two months of stronger gain. Inventories outside of transportation improved 0.2% (4.6% y/y) following two months of 0.7% increase. Durable goods inventories rose 0.3% (4.4% y/y) after a 0.5% rise. Computer & electronic product inventories gained 0.3% (3.9% y/y) after a 0.2% rise, but machinery inventories were fairly steady (5.5% y/y) after two months of 0.5% increase. Nondurable product inventories rose 0.3% (3.4% y/y) after a 0.9% gain reflecting a 2.2% rise (15.4% y/y) in petroleum refinery inventories. Apparel inventories rose 0.7% (-1.4% y/y) after a 2.0% jump, and basic chemical inventories held steady (2.0% y/y) following two months of 0.3% rise. Food product inventories eased 0.3% (0.0% y/y) after a 0.6% rise.

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

Factory Sector (% chg) - NAICS Classification Jan Dec Nov Jan Y/Y 2017 2016 2015
New Orders -1.4 1.8 1.7 6.6 6.0 -1.9 -7.7
Shipments 0.6 0.7 1.4 6.1 5.2 -1.8 -5.8
Unfilled Orders -0.3 0.6 0.1 2.0 1.9 -1.9 -2.0
Inventories 0.3 0.7 0.5 4.0 4.1 0.7 0.0
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