U.S. Factory Inventories & Orders Slip in September
by:Tom Moeller
|in:Economy in Brief
Summary
- Inventory easing follows six months of little change.
- Order weakening is led by aircraft.
- Unfilled orders steady, and they remain soft.
The Commerce Department reported that inventories in the factory sector declined 0.2% (+0.2% y/y) during September after a 0.1% August rise. During the last six months, inventories have been little changed. Durable goods inventories eased 0.2% (+0.9% y/y) after holding steady. Transportation equipment inventories fell 0.6% (+3.8% y/y) after easing 0.1%. Furniture inventories rose 0.3% (-1.6% y/y) after falling 0.3% while electrical equipment inventories rose 0.2% (-1.4% y/y) following no change in August. Amongst nondurable goods industries, inventories eased 0.3% (-0.9% y/y) after rising 0.3% in August. Food product inventories eased 0.1% (-2.3% y/y) after falling 0.2%. Petroleum & coal inventories fell 2.2% (-7.0% y/y) following a 0.2% rise and plastics & rubber inventories rose 0.4% (-0.1% y/y) following a 0.5% increase. These changes were accompanied by a 0.6% increase (2.6% y/y) in apparel after they rose 0.7%. Chemical inventories gained 0.6% (2.6% y/y) after a 0.7% rise while paper product inventories gained 0.5% (1.5% y/y) after a 0.6% rise.
Orders to all manufacturers fell 0.5% (-1.6% y/y) in September following a 0.8% August fall. The decline was led by a 0.7% weakening (-2.1% y/y) in durable goods orders after they fell 0.9% in August. Transportation orders dropped 3.1% (-7.9% y/y) after a 3.4% decline due to a second decline in commercial aircraft. New orders excluding transportation edged up 0.1% (-0.3% y/y) after easing 0.2%. Orders for nondurable goods (which equal shipments) eased 0.2% (-1.2% y/y) after falling 0.7%. The decline reflected a 1.8% decline (-17.0% y/y) in orders to oil refineries which came after a 3.0% fall and a 0.1% slip (+5.3% y/y) in basic chemicals for the second straight month. Orders for textile products rose 0.3% (-0.7% y/y) following a 0.1% slip and apparel orders dipped 0.2% (-2.8% y/y) after they fell 1.7% in August. Orders for food products rose 0.2% (1.3% y/y) after easing 0.1% and paper product orders held eased 0.1% (+2.2% y/y) after a 0.3% rise. Durable goods shipments fell 0.5% (+1.6% y/y) about as they did in August. Transportation shipments fell 2.4% (+4.3% y/y) following a 2.2% drop while excluding transportation shipments held steady (-0.6% y/y) after a 0.4% decline.
Unfilled orders improved 0.2% in September (3.1% y/y) for the third straight month. Excluding the transportation sector, they rose 0.2% (-0.2% y/y), the same as in August. Backlogs of electrical equipment edged 0.1% higher and were steady y/y after they rose 0.4% in August. Unfilled orders in the machinery sector eased 0.3% (-4.0% y/y), the same as in August and unfilled orders for transportation equipment edged 0.1% higher (5.0% y/y) following a 0.2% rise. Unfilled orders of furniture rose 0.2% (0.2% y/y) in September following a 0.9% decline and fabricated metals backlogs rose 0.7% (0.6% y/y) after rising 0.2% in August.
The factory sector figures are available in Haver's USECON database.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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