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Economy in Brief

U.S. Factory Orders Jump; Shipments Notch Another Record High
by Gerald D. Cohen  May 3, 2018

Manufacturers' orders gained 1.6% (+8.1% year-on-year) during March, the second consecutive monthly increase of this magnitude. Manufacturing shipments rose 0.4% (6.8% y/y) to a record high $503 billion. Shipments have grown for 12 consecutive months.

Orders in the volatile durable goods sector jumped 2.6% (9.6% y/y) following a 3.6% gain in February. Orders for transportation equipment soared 7.6% (15.0% y/y) due to a 44.5% surge in volatile civilian aircraft bookings. Total factory orders excluding transportation edged up 0.3% (6.6% y/y). Machinery orders fell 1.9% (+5.4% y/y) after a 0.6% gain. Orders for computers & electronic products rose 1.0% (10.1% y/y), following two consecutive monthly declines.

Shipments of durable goods grew 0.4% (7.1% y/y) in March to a record high $250 billion. Shipments of transportation products increased 1.8% (7.6% y/y) reflecting a 15.7% jump in civilian aircraft & parts (15.4% y/y). Machinery shipments fell 1.6% (+6.7% y/y) reversing February's gain. Computer & electronic product shipments declined 0.7% (+6.6% y/y).

Nondurable goods shipments, which equal nondurable goods orders because nondurables are shipped in the same period they are ordered, rose 0.5% (6.5% y/y) after a 0.3% decline in February. The increase in nondurables was the result of gains in the largest nondurable categories: food products (0.1% month-on-month; 3.3% y/y), basic chemicals (0.4% m/m; 4.4% y/y), and petroleum & coal shipments (1.5% m/m; 21.4% y/y).

Unfilled orders of durable goods, which as implied above equals unfilled factory orders, increased 0.8% (3.0% y/y). Transportation equipment backlogs rose 1.0% (2.3% y/y). Excluding the transportation sector, unfilled orders gained 0.3% (4.5% y/y). Non-transportation unfilled orders have been on the rise since the middle of 2016. Machinery backlogs edged down 0.1% (+3.8% y/y), the second consecutive monthly decline. The computer & electronic sector increased 0.2% (2.2% y/y) after two down months.

Inventories of manufactured products gained 0.3% (4.3% y/y) and have been on the rise since late 2016. Durable goods inventories--which are roughly 60% of total inventories--edged up 0.1% (4.5% y/y). Transportation fell 0.6% (+1.8% y/y). Inventories outside of transportation grew 0.5% (5.0% y/y). The machinery sector rose 0.5% (5.4% y/y). Computer & electronic product inventories picked up 0.3% (4.3% y/y). Nondurable goods inventories increased 0.5% (4.1% y/y). Basic chemical inventories, which have the largest nondurable inventories, edged up 0.2% (1.7% y/y). Meanwhile, food product inventories, the second largest category, rose 0.3% (0.7% y/y). Petroleum refinery inventories jumped 1.7% (19.7% y/y).

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

Factory Sector (% chg) - NAICS Classification Mar Feb Jan Mar Y/Y 2017 2016 2015
New Orders 1.6 1.6 -1.3 8.1 6.3 -2.1 -7.6
Shipments 0.4 0.2 0.7 6.8 5.5 -2.0 -5.8
Unfilled Orders 0.8 0.3 -0.3 3.0 1.9 -1.7 -2.0
Inventories 0.3 0.4 0.4 4.3 4.0 0.8 -0.1
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