Global| Nov 02 2018U.S. Factory Orders in September Add to August Jump
by:Sandy Batten
|in:Economy in Brief
Summary
Manufacturers' orders increased 0.7% m/m (7.9% y/y) in September, on top of an upwardly revised 2.6% m/m jump in August. The Action Economics Forecast survey had looked for a 0.5% m/m rise. This was the sixth monthly increase thus far [...]
Manufacturers' orders increased 0.7% m/m (7.9% y/y) in September, on top of an upwardly revised 2.6% m/m jump in August. The Action Economics Forecast survey had looked for a 0.5% m/m rise. This was the sixth monthly increase thus far in the nine months of 2018. Durable goods orders rose 0.7% m/m (7.8% y/y), revised down slightly from the 0.8% m/m increase in the advance report released on October 25. Besides the revision to durables goods figures, the new information in this report was for nondurable goods. Orders of nondurable goods increased 0.6% m/m (8.0% y/y) in September, the same monthly increase as in August.
The strength in overall factory orders in September was in transportation goods. Those orders were up 1.9% m/m (11.5% y/y) in September following a 13.3% m/m surge in August. As already noted in the advance report for durable goods, the major driving factor was orders for defense aircraft. (Orders for defense aircraft and parts exploded 119% m/m in September.) Excluding transportation orders, the remaining factory orders were up a more modest 0.4% m/m (7.1% y/y) in September, the same monthly increase as in August. And, excluding defense orders, remaining orders were unchanged in September (+7.1% y/y) following a 1.5% m/m jump in August.
Total factory sector shipments rose 0.9% m/m (7.9% y/y) in September following an upwardly revised 0.7% m/m increase in August. This was the fifteenth consecutive monthly increase in total shipments. Shipments of durable goods rose 1.2% m/m (7.9% y/y), revised down slightly from the 1.3% m/m increase in the advance report. Shipments of nondurable goods increased 0.6% (8.0% y/y), the same monthly increase as in August. The monthly rise in nondurables shipments was led by textile products (1.2% m/m) and petroleum and coal products (2.4% m/m).
Unfilled orders posted a solid 0.8% m/m (4.9% y/y) rise in September on top of a 0.9% m/m increase in August. Backlogs of transportation orders led the overall increase. They were up 1.0% m/m (due mostly to defense aircraft), the seventh increase in the past eight months.
Inventories at the factory level rose 0.5% m/m (4.8% y/y) in September following an upwardly revised 0.1% increase in August. Inventories of durable goods increased 0.7% m/m (4.5% y/y) after a 0.2% m/m decline in August. Inventories of nondurable goods increased 0.2% m/m (5.3% y/y), their fifteenth consecutive monthly increase. A 0.8% m/m rise in petroleum and coal product inventories accounted for almost half of the rise in nondurables inventories.
The factory sector figures are available in Haver's USECON database. The Action Economics Forecasts survey is in AS1REPNA.
| Factory Sector (% chg) - NAICS Classification | Sep | Aug | Jul | Sep Y/Y | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|
| New Orders | 0.7 | 2.6 | -0.5 | 7.9 | 5.7 | -2.9 | -8.2 |
| Shipments | 0.9 | 0.7 | 0.0 | 7.9 | 5.0 | -3.2 | -6.2 |
| Unfilled Orders | 0.8 | 0.9 | 0.1 | 4.9 | 2.0 | -1.2 | -2.7 |
| Inventories | 0.5 | 0.1 | 0.9 | 4.8 | 4.5 | -0.7 | -0.8 |
Sandy Batten
AuthorMore in Author Profile »Sandy Batten has more than 30 years of experience analyzing industrial economies and financial markets and a wide range of experience across the financial services sector, government, and academia. Before joining Haver Analytics, Sandy was a Vice President and Senior Economist at Citibank; Senior Credit Market Analyst at CDC Investment Management, Managing Director at Bear Stearns, and Executive Director at JPMorgan. In 2008, Sandy was named the most accurate US forecaster by the National Association for Business Economics. He is a member of the New York Forecasters Club, NABE, and the American Economic Association. Prior to his time in the financial services sector, Sandy was a Research Officer at the Federal Reserve Bank of St. Louis, Senior Staff Economist on the President’s Council of Economic Advisors, Deputy Assistant Secretary for Economic Policy at the US Treasury, and Economist at the International Monetary Fund. Sandy has taught economics at St. Louis University, Denison University, and Muskingun College. He has published numerous peer-reviewed articles in a wide range of academic publications. He has a B.A. in economics from the University of Richmond and a M.A. and Ph.D. in economics from The Ohio State University.
