U.S. Factory Orders Decline in May After Three Consecutive Gains; Shipments Fall, but Backlogs & Inventories Rise
by:Tom Moeller
|in:Economy in Brief
Summary
- Durable goods orders edge higher, but nondurable goods orders decline.
- Total unfilled orders rise but excluding transportation fall.
- Inventories rise slightly.
Total factory orders declined 0.5% (+0.9% y/y) during May after increasing 0.4% in April, revised from 0.7%, according to the U.S. Census Bureau. A 0.3% increase had been expected in the Action Economics Forecast Survey. The May decline followed three consecutive months of increase. Orders excluding the transportation sector fell 0.7% (+2.5% y/y) after rising for three consecutive months.
Durable goods orders edged 0.1% higher (-1.5% y/y) in May following a 0.2% gain in April and larger increases in the prior two months. The gain matched the rise in the advance report. The May increase reflected a 1.2% rise (3.4% y/y) in furniture, a 0.5% gain (-6.2% y/y) in transportation equipment and a 0.3% rise (3.1% y/y) in fabricated metals orders. Computer & electronic product orders edged 0.1% higher, up 3.3% y/y. Elsewhere orders fell. Primary metals orders were off 0.4% (-0.2% y/y) and electrical equipment, appliances & components orders fell 0.3% (+0.9% y/y). Machinery orders weakened 0.5% (-0.6% y/y).
Nondurable goods orders, which equal nondurable goods shipments, fell 1.0% (+3.4% y/y) in May after a 0.5% April increase. The May decline reflected a 6.2% drop (+5.1% y/y) in petroleum refineries. Textile product orders weakened 1.7% (-2.3% y/y) and apparel shipments were off 1.0% (-6.8% y/y). Rising were basic chemical orders by 0.3% (4.1% y/y) and food product orders which rose 0.4% (1.3% y/y).
Total shipments fell 0.7% (+2.0% y/y) in May after a 0.8% increase in April. Excluding transportation, shipments fell 0.7% (+2.3 y/y) following three straight months of increase. Shipments of durable goods fell 0.4% (+0.7% y/y) after a 1.1% gain. The May decline reflected a 0.9% drop (+0.5% y/y) in transportation equipment and a 0.2% decline (+0.5% y/y) in machinery. Electrical equipment & appliance shipments declined 0.5% (+0.4% y/y) while primary metals shipments held steady (-0.8% y/y). Shipments of furniture rose 0.7% (0.5% y/y) while shipments of computers & appliances eased 0.1% (+1.4% y/y).
Unfilled orders rose 0.2% (7.4% y/y) in May after edging 0.1% higher in April. Excluding transportation, unfilled orders dipped 0.1% (-0.8% y/y), the fifth straight month of decline. Backlogs of durable goods rose 0.2% (7.4% y/y) in May, which included a 0.4% rise (12.5% y/y) in transportation equipment.
Inventories increased 0.2% (0.9% y/y) in May following a 0.1% uptick in April. Excluding transportation, inventories edged 0.1% higher (-0.1% y/y) after holding steady for two consecutive months. Durable goods inventories rose 0.3% (1.5% y/y) in May, the fifth rise in six months. Nondurable goods inventories ticked up 0.1% (-0.1% y/y) for the third consecutive month.
The factory sector data are available in Haver's USECON database. The Action Economics Forecast Survey is in the AS1REPNA 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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