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Economy in Brief

U.S. Factory Orders and Shipments Strengthen
by Tom Moeller  August 2, 2018

Activity in the factory sector continues to improve. Manufacturers' orders increased 0.7% (6.1% y/y) during June following an unrevised 0.4% May increase. Manufacturing shipments surged 1.0% (8.4% y/y) after a 0.6% May rise.

Durable goods orders improved 0.8% (3.1% y/y), revised from 1.0% in last month's advance report. The rise followed a 0.3% May decline. Orders for transportation equipment jumped 2.1% in June (-6.2% y/y) due to a 20.2% surge in defense aircraft bookings. Nondefense aircraft orders rose 4.2% while motor vehicle & parts orders rose 0.9%. Total factory orders excluding transportation improved 0.4% (9.1% y/y). Machinery orders were little changed (+5.6% y/y) following a 4.6% rise. Orders for computers & electronic products rose 0.8% (10.4% y/y) and electrical equipment bookings gained 0.8% (8.4% y/y).

Nondurable goods orders, which equal shipments because nondurables are shipped when ordered, gained 0.5% (9.4% y/y) after a 1.1% jump. Petroleum shipments increased 0.8% (39.6% y/y) with higher prices. Food product shipments slipped 0.2% (+0.9% y/y) for the second straight month. Basic chemical shipments increased 0.8% (6.3% y/y) and paper product shipments gained 0.5% (6.8% y/y). Shipments of apparel rose 1.6% (7.6% y/y).

Shipments of durable goods strengthened 1.5% (7.5% y/y) last month after a 0.2% gain. Shipments of transportation products surged 3.7% (6.7% y/y) reflecting strength in truck shipments. Shipments of civilian aircraft rose 6.0% (8.0% y/y), but automobile shipments fell 0.7% (-9.2% y/y). Shipments outside of the transportation sector increased 0.5% (8.8% y/y) following a 0.9% rise. Machinery shipments improved 0.6% (7.1% y/y) after a 1.2% strengthening. Computer & electronic product shipments rose 0.1% (5.7% y/y). Electrical equipment & appliance shipments fell 0.3% (+4.4% y/y) for the second straight month.

Unfilled orders of durable goods rose 0.4% (3.6% y/y), up for the fifth consecutive month. Transportation equipment backlogs gained 0.3% (2.7% y/y). Excluding the transportation sector, unfilled orders rose 0.6% (5.7% y/y) following two straight 0.7% increases. Machinery backlogs improved 0.2% (3.2% y/y). Unfilled orders of computer & electronic products increased 0.6% (3.5% y/y) and electrical equipment & appliance backlogs rose 1.1% (1.9% y/y) after three straight months of moderate increase.

Inventories of manufactured products ticked 0.1% higher (5.1% y/y) after stronger monthly gains back through the middle of last year. Durable goods inventories slipped 0.1% (+4.6% y/y). Transportation product inventories declined 1.4% (+2.4% y/y). Outside of the transportation sector, inventories rose 0.5% (5.8% y/y), the strongest increase this year. Machinery sector inventories increased an accelerated 0.4% (4.9% y/y). Computer & electronic product inventories rose 0.4% (3.4% y/y). Nondurable goods inventories improved 0.4% (5.9% y/y). Basic chemical inventories rose 0.8% (3.8% y/y) but food product inventories eased 0.1% (-0.1% y/y), down for the third straight month. Petroleum refinery inventories rose 0.7% and by roughly one-third y/y.

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

Factory Sector (% chg) - NAICS Classification Jun May Apr Jun Y/Y 2017 2016 2015
New Orders 0.7 0.4 -0.4 6.1 5.7 -2.9 -8.2
Shipments 1.0 0.6 0.1 8.4 5.0 -3.2 -6.2
Unfilled Orders 0.4 0.5 0.6 3.6 2.0 -1.2 -2.7
Inventories 0.1 0.2 0.4 5.1 4.5 -0.7 -0.8
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