Global| Dec 03 2010U.S. Factory Shipments & Inventories Continue To Throw Off Mixed Signals
Summary
As indicated by the advance report on durable goods industries last week, the total manufacturing sector appears to have lost some momentum in the last few months through October. Shipments of manufactured goods rose just 0.3% in [...]
As indicated by the advance report on durable goods industries last week, the
total manufacturing sector appears to have lost some momentum in the last few
months through October. Shipments of manufactured goods rose just 0.3% in
October (+6.8% y/y) and new orders fell 0.9% (+8.9% y/y). Revisions to
durable goods previously reported were mild; shipments are still seen with a
0.9% decline in the month and orders were shaved to a 3.4% decrease from 3.3% in
the advance release. Nondurable goods shipments rose 1.5% in October and
were 7.7% above year-ago amounts; while this looks good, it compares to gains
back during the spring at about twice that year-to-year rate.
Factory inventories are growing, with October's up 0.9% (+5.8% from a year ago). The inventory/shipments ratio ticked up in October to 1.28 from 1.27 in September; it is about the same as a year ago, but higher than last winter when shipments seemed stronger. Inventories at all three stages of fabrication are rising; the increases in materials & supplies, +4.8% y/y, and work-in-process, +7.7% y/y, suggest that factory managers may believe their demand is moving ahead, so they should rebuild stocks. But the increase in finished goods, +5.1% y/y, could be associated with the recent moderation in shipments, a less desirable development.
Thus, while there are some signs of improving activity, these continue to look quite uneven and tenuous.
The Manufacturers' Shipments, Inventories and Orders (MSIO) data are available in Haver's USECON database.
| U.S. Manufacturing Sector (NAICS, %) | Oct | Sept | Aug | Y/Y | 2009 | 2008 | 2007 |
|---|---|---|---|---|---|---|---|
| Inventories | 0.9 | 1.1 | 0.4 | 5.8 | -8.8 | -0.8 | 7.6 |
| New Orders | -0.9 | 3.0 | 0.0 | 8.9 | -17.8 | -1.0 | 8.7 |
| Shipments | 0.3 | 0.7 | -0.2 | 6.8 | -15.6 | 2.3 | 6.4 |
| Unfilled Orders | 0.6 | 1.3 | 0.2 | 1.8 | -11.1 | 2.8 | 31.2 |
Carol Stone, CBE
AuthorMore in Author Profile »Carol Stone, CBE came to Haver Analytics in 2003 following more than 35 years as a financial market economist at major Wall Street financial institutions, most especially Merrill Lynch and Nomura Securities. She has broad experience in analysis and forecasting of flow-of-funds accounts, the federal budget and Federal Reserve operations. At Nomura Securites, among other duties, she developed various indicator forecasting tools and edited a daily global publication produced in London and New York for readers in Tokyo. At Haver Analytics, Carol is a member of the Research Department, aiding database managers with research and documentation efforts, as well as posting commentary on select economic reports. In addition, she conducts Ways-of-the-World, a blog on economic issues for an Episcopal-Church-affiliated website, The Geranium Farm. During her career, Carol served as an officer of the Money Marketeers and the Downtown Economists Club. She has a PhD from NYU's Stern School of Business. She lives in Brooklyn, New York, and has a weekend home on Long Island.
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