U.S. Factory Orders Decline More Than Expected in January
Summary
- Jan. manufacturers’ new orders -3.6% (-2.0% y/y); Dec. revised down to -0.3% (+1.8% y/y).
- Continued m/m declines in durable goods orders (-6.2%), nondurable goods orders (-1.1%), and shipments (-1.0%).
- Unfilled orders rise 0.2%, the 13th m/m increase in 14 months.
- Inventories dip 0.1% after holding steady for three straight months.
Total factory orders fell 3.6% m/m (-2.0% y/y) in January after a 0.3% decline in December (+0.2% initially) and a 2.6% rise in November (unrevised), according to data from the U.S. Census Bureau. The Action Economics Forecast Survey had expected a 2.8% m/m January drop. The January m/m fall was the third in four months. Notably, orders for nondefense aircraft & parts plunged 58.9% in January following a 1.0% increase in December and an outsized 84.1% rebound in November. Factory orders excluding defense fell 4.1% (-1.9% y/y) in January, down three of the last four months, after a 0.2% decline in December. Factory orders excluding the transportation sector slid 0.8% (-1.6% y/y), the third m/m slide in four months, on top of a 0.3% December decrease.
Durable goods orders dropped 6.2% (-0.7% y/y) in January after a 0.3% decline in December (in line with a 6.1% m/m fall for January in the advance report on Feb. 27). The January drop reflected m/m orders declines of 16.2% (-3.9% y/y) in transportation equipment, 2.2% (-4.7% y/y) in furniture & related products, 1.9% (-1.1% y/y) in primary metals, 0.9% (+3.2% y/y) in fabricated metal products, and 0.3% (-0.4% y/y) in machinery. To the upside, durable goods orders for computers & electronic products (1.3%; 5.7% y/y) and electrical equipment, appliances & components (0.9%; 2.5% y/y) continued to increase m/m in January.
Nondurable goods orders, which equal nondurable goods shipments, fell 1.1% (-3.1% y/y) in January, the third m/m fall in four months, after a 0.3% decrease in December. The January fall reflected m/m drops of 3.8% (-13.8% y/y) in petroleum & coal products, 2.6% (-10.6% y/y) in apparel, 1.3% (-5.8% y/y) in textile mills, 0.9% (-0.2% y/y) in basic chemicals, 0.5% (+0.5% y/y) in plastics & rubber products, 0.3% (-0.2% y/y) in food products, and 0.1% (-2.1% y/y) in paper products. To the upside, the following nondurable goods shipments advanced m/m in January: leather & allied products (3.0%; 5.3% y/y), beverage & tobacco products (1.4%; 10.3% y/y), printing (0.9%; -2.1% y/y), and textile products (0.9%; -3.2% y/y).
Total shipments slid 1.0% (-1.6% y/y) in January, the third m/m slide in four months, after falling 0.5% in December. Excluding transportation, shipments dropped 0.6% (-1.7% y/y), down for the third time in four months, after a 0.3% December decline. Shipments of durable goods industries fell 0.9% (-0.1% y/y) in January, the fourth m/m fall in five months, on top of a 0.6% drop in December. The January fall reflected m/m durable goods shipments declines of 3.2% (-1.4% y/y) in transportation equipment, 1.4% (-3.3% y/y) in nonmetallic mineral products, 1.1% (-2.2% y/y) in primary metals, 0.6% (-0.3% y/y) in miscellaneous durable goods, and 0.2% (+2.9% y/y) in fabricated metal products. In contrast, the following durable goods shipments rose m/m in January: electrical equipment, appliances & components (2.1%; 2.0% y/y), machinery (1.4%; 2.1% y/y), furniture & related products (1.4%; -2.5% y/y), wood products (1.0%; -0.5% y/y), and computers & electronic products (0.3%; 1.0% y/y).
Unfilled orders rose 0.2% (9.3% y/y) in January, the 13th m/m rise in 14 months, after a 1.3% increase in December and November. Excluding transportation, unfilled orders fell 0.3% (-0.7% y/y) in January following no change in December and a 0.1% downtick in November and October. Backlogs of durable goods also rose 0.2% (9.3% y/y), reflecting rises of 0.4% (15.6% y/y) in transportation equipment and 0.2% (0.8% y/y) in computers & electronic products.
Inventories slipped 0.1% (-0.5% y/y) in January after being virtually unchanged in the prior three months. Excluding transportation, inventories fell 0.3% (-1.4% y/y) after a 0.2% December decline. Durable goods inventories rose 0.2% (1.2% y/y) in January, the sixth straight m/m rise, while nondurable goods inventories fell 0.6% (-3.1% y/y), the fourth consecutive m/m fall.
The factory sector data are available in Haver's USECON database. The Action Economics Forecast Survey is in the AS1REPNA database.
Winnie Tapasanun
AuthorMore in Author Profile »Winnie Tapasanun has been working for Haver Analytics since 2013. She has 20+ years of working in the financial services industry. As Vice President and Economic Analyst at Globicus International, Inc., a New York-based company specializing in macroeconomics and financial markets, Winnie oversaw the company’s business operations, managed financial and economic data, and wrote daily reports on macroeconomics and financial markets. Prior to working at Globicus, she was Investment Promotion Officer at the New York Office of the Thailand Board of Investment (BOI) where she wrote monthly reports on the U.S. economic outlook, wrote reports on the outlook of key U.S. industries, and assisted investors on doing business and investment in Thailand. Prior to joining the BOI, she was Adjunct Professor teaching International Political Economy/International Relations at the City College of New York. Prior to her teaching experience at the CCNY, Winnie successfully completed internships at the United Nations. Winnie holds an MA Degree from Long Island University, New York. She also did graduate studies at Columbia University in the City of New York and doctoral requirements at the Graduate Center of the City University of New York. Her areas of specialization are international political economy, macroeconomics, financial markets, political economy, international relations, and business development/business strategy. Her regional specialization includes, but not limited to, Southeast Asia and East Asia. Winnie is bilingual in English and Thai with competency in French. She loves to travel (~30 countries) to better understand each country’s unique economy, fascinating culture and people as well as the global economy as a whole.
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