U.S. Factory Orders Decrease in December, the Fourth M/M Decline in Five Months
Summary
- Manufacturers’ new orders -0.9% (-1.1% y/y) in Dec. vs. -0.8% (-2.3% y/y) in Nov.
- Durable goods orders (-2.2%) fall m/m, while nondurable goods orders (+0.3%) and shipments (+0.6%) rise m/m.
- Unfilled orders drop 0.5% following five straight m/m increases.
- Inventories rise 0.4% m/m for the second successive month.
Total factory orders fell a slightly more-than-expected 0.9% m/m (-1.1% y/y) in December after a 0.8% decline in November and a 0.5% increase in October, data from the U.S. Census Bureau showed. A 0.8% m/m December decrease had been expected in the Action Economics Forecast Survey. The December reading was the fourth m/m fall in five months. Notably, orders for nondefense aircraft & parts plunged 45.7% in December on top of a 20.1% slump in November. Factory orders excluding defense fell 0.9% (-1.9% y/y), down for the fourth month in five, after a 0.4% November decline. Factory orders excluding the transportation sector grew 0.3% (1.3% y/y), the fourth consecutive m/m gain and the sixth in seven months, following a 0.2% November increase. During all of 2024, factory orders eased 0.2% after gaining 0.9% in 2023 and 12.5% in 2022.
Durable goods orders slid 2.2% (-3.9% y/y) in December, the fourth m/m slide in five months, after a 2.0% decline in November (matching a 2.2% m/m decrease for Dec. in the advance report on Jan. 28). The December slide reflected m/m orders drops of 7.4% (-13.4% y/y) in transportation equipment, 0.5% (-0.4% y/y) in furniture & related products, and 0.5% (-0.7% y/y) in primary metals. To the upside, the following durable goods orders rose m/m in December: fabricated metal products (1.1%; 2.1% y/y), electrical equipment, appliances & components (1.0%; 4.4% y/y), computers & electronic products (0.3%; 1.3% y/y), and machinery (0.1%; 0.5% y/y).
Nondurable goods orders, which equal nondurable goods shipments, rose 0.3% (1.5% y/y) in December, the third straight m/m rise, after a 0.4% increase in November. The December rise reflected m/m gains of 4.5% (2.9% y/y) in apparel, 2.4% (2.5% y/y) in textile products, 0.7% (9.6% y/y) in beverage & tobacco products, 0.7% (-4.9% y/y) in petroleum & coal products, 0.3% (1.7% y/y) in food products, 0.3% (2.6% y/y) in paper products, and 0.2% (-1.1% y/y) in plastics & rubber products. To the downside, the following nondurable goods shipments fell m/m in December: textile mills (-0.8%; +0.05% y/y), leather & allied products (-0.2%; +0.9% y/y), and printing (-0.1%; +4.0% y/y). Meanwhile, nondurable goods shipments for chemical products were virtually unchanged (5.4% y/y) in December after two successive m/m increases.
Total shipments rose 0.6% (1.9% y/y) in December following a 0.1% uptick in November and three consecutive m/m declines. Excluding transportation, shipments rose 0.2% (1.3% y/y), the fourth straight m/m rise and the fifth in six months, after a 0.3% November increase. Shipments of durable goods industries rebounded 0.9% (2.3% y/y) in December, the first m/m increase since July, after a 0.3% decline in November. This reflected m/m durable goods shipments rises of 2.8% (5.2% y/y) in transportation equipment, 1.6% (4.1% y/y) in electrical equipment, appliances & components, 0.6% (0.02% y/y) in nonmetallic mineral products, 0.4% (2.1% y/y) in miscellaneous durable goods, 0.2% (0.3% y/y) in machinery, and 0.2% (-0.2% y/y) in wood products. In contrast, the following durable goods shipments fell m/m in December: furniture & related products (-0.9%; +0.4% y/y), primary metals (-0.6%; +0.9% y/y), fabricated metal products (-0.3%; +0.3% y/y), and computers & electronic products (-0.1%; +1.8% y/y).
Unfilled orders fell 0.5% (+0.5% y/y) in December, the first m/m fall since June, after a 0.2% increase in November. Excluding transportation, unfilled orders increased 0.2% (0.2% y/y) in December after holding steady in November and rising 0.2% in the prior three months. Backlogs of durable goods also fell 0.5% (+0.5% y/y) in December, led by m/m drops of 0.8% (+0.7% y/y) in transportation equipment and 0.4% (+3.0% y/y) in primary metals.
Inventories rose 0.4% (0.8% y/y) in December following a 0.4% rise in November and two successive m/m declines. Excluding transportation, inventories increased 0.2% (0.02% y/y) in December after edging up 0.1% in November. Durable goods inventories rose 0.4% (1.3% y/y) in December after a 0.5% rise in November; nondurable goods inventories grew 0.3% (0.1% y/y) following a 0.1% November increase and two consecutive m/m declines.
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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