U.S. Factory Orders Decline Sharply Led by Aircraft in October
by:Tom Moeller
|in:Economy in Brief
Summary
- Total factory orders slide as aircraft bookings halve.
- Durable & nondurable goods shipments weaken.
- Unfilled orders & inventories rise.
Total factory orders fell 3.6% (-2.1% y/y) during October after increasing 2.3% in September. A 2.8% decline had been expected in the Action Economic Forecast Survey. Orders for durable goods fell 5.4% (+0.3% y/y). The decline was unrevised from the advance report and it followed a 4.0% September increase. Civilian aircraft orders halved after doubling in September while motor vehicle & parts orders eased 0.8% (+2.1% y/y) after slipping 0.1%. Factory orders excluding transportation fell 1.2% (-2.2% y/y) after a 0.4% rise. Orders for computers & electronic products gained 0.3% (4.0% y/y) after rising 0.8% in September. Machinery orders fell 0.3% (-0.7% y/y) following a little change while electrical equipment & appliance orders fell 1.1% (+3.8% y/y) following a 0.8% drop.
Nondurable goods orders, which equal shipments, weakened 1.9% (-4.3% y/y) after increasing 0.6% in September. Petroleum and coal products fell 8.4% (-19.1% y/y) with lower crude oil prices. Textile orders rose 0.7% (-2.3% y/y) while apparel orders declined 1.2% (-4.1% y/y). Paper product orders rose 0.4% (0.6% y/y) and textile mill orders weakened 0.5% (-5.9% y/y). Basic chemicals were little changed (+1.2% y/y) and food orders rose 0.1% (0.4% y/y).
Total shipments fell 1.4% (-1.6% y/y) after holding steady in September. Shipments of durable goods declined 0.8% (+1.3% y/y) after falling 0.6% in September. Computer & electronic product shipments rose 0.1% (1.1% y/y) while electrical equipment & appliance shipments weakened 0.7% (+7.3% y/y). Machinery shipments rose 0.4% (1.6% y/y) but primary metals shipments fell 0.4% (-1.2% y/y) and fabricated metals shipments weakened 0.4% (+1.5% y/y.
Unfilled orders rose 0.3% (7.1% y/y) in October, their eighth consecutive monthly increase. Unfilled orders increased for computers & electronic products by 0.1% (0.5% y/y) but for machinery they fell 0.4% (-2.0% y/y). Primary metals backlogs rose 0.5% (0.3% y/y) while fabricated metal products rose 0.4% (-0.2% y/y. Electrical equipment backlogs eased 0.2% and were unchanged y/y. Transportation equipment backlogs rose 0.4% (12.3% y/y while unfilled orders for furniture rose 0.1% (-8.1% y/y).
Total inventories increased 0.1% (-0.3% y/y) in October for the third time in four months. Inventories of durable goods increased 0.3% (1.1% y/y) while inventories of nondurable goods fell 0.2% (-2.4% y/y) after three consecutive monthly gains.
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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