Factory Orders Jump in June on Surge in Nondefense Aircraft
by:Sandy Batten
|in:Economy in Brief
Summary
- Durable goods orders jumped in June, led by nondefense aircraft; nondurable goods orders were little changed.
- Total shipments rose for the second consecutive month.
- Durable goods inventories rose modestly while nondurable goods inventories fell.
Manufacturers’ new orders increased an outsized 2.3% m/m (-0.2% y/y) in June following a 0.4% monthly gain in May (revised up slightly from 0.3% previously), according to data from the U.S. Census Bureau. The Action Economics Forecast Survey expected a 2.3% advance for June. This was the fourth consecutive monthly gain and was driven by a 69.4% m/m surge in orders for nondefense aircraft. Total manufacturing orders excluding nondefense aircraft orders fell 0.3% m/m in June on top of a 0.6% m/m decline in May. Orders excluding all transportation rose 0.2% m/m (-4.9% y/y) in June for their first monthly increase in five months.
New orders for durable goods advanced 4.6% m/m (+8.8% y/y) in June, again led by the surge in nondefense aircraft orders. However, except for machinery orders (-0.2% m/m), orders increased in June for all other major categories. In addition to the 12.0% m/m jump in transportation orders, orders for computers and electronic products were up 1.6% m/m, orders for electrical equipment rose 1.5% m/m, and furniture orders gained 1.0% m/m.
Nondurable goods industry orders—which equal nondurable goods shipments—edged up 0.1% m/m (-8.1% y/y), their first monthly gain in five months. The June reading reflected a wide range of increases and decreases. Leading the increases were a 2.5% m/m jump in beverage and tobacco products, a 1.8% m/m rise in printing, and a 0.9% m/m increase in plastics and rubber products. Leading the decreases were a 5.2% m/m plunge in apparel and a 1.3% m/m drop in petroleum and coal products, the fifth consecutive monthly decline.
Shipments of all manufactured goods edged up 0.1% m/m (-2.6% y/y) in June following a 0.4% monthly increase in May (revised up marginally from 0.3%). Total shipments had fallen in February, March and April. Durable goods shipments increased 0.2% m/m (3.7% y/y) in June. Transportation shipments increased 0.2% m/m in June with durable goods shipments excluding transportation also rising 0.2% m/m in June. Shipments of fabricated metal products posted the largest monthly gain in June with a 1.2% m/m rise, their biggest monthly gain since December 2021. Furniture shipments increased 0.7% m/m. Miscellaneous shipments posted the largest monthly decline, falling 0.8% m/m in June.
Unfilled orders were up 1.8% m/m in June, their fourth consecutive monthly increase, on top of an 0.8% m/m increase in May. This was the largest monthly increase since July 2014. Nondurable goods orders are shipped in the same period in which they are ordered. So, there are no unfinished nondurable goods orders. The June rise in unfinished orders was led by a 2.9% m/m jump in unfinished transportation orders, reflecting a 4.2% monthly surge in unfinished nondefense aircraft orders (also the largest monthly gain since July 2014). Among other sectors, unfinished electrical equipment and appliance orders rose 0.8% m/m in June while unfinished furniture orders fell 1.2% m/m, their fourth consecutive monthly decline.
Manufacturers’ inventories were essentially unchanged in June (-0.1% y/y) following a 0.2% monthly drop in May. Inventories of durable goods edged up 0.1% m/m in June while inventories of nondurable goods fell 0.3% m/m, their fifth consecutive monthly decline.
The factory sector data are available in Haver’s USECON database. The Action Economics Forecast Survey is in the AS1REPNA database.
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.
