U.S. Factory Orders Increase More Than Expected in October
Summary
- Oct. new orders +1.0%, the third straight m/m gain; Sept. and Aug. unrevised.
- Shipments rise 0.7%, w/ a 1.0% gain in nondurable goods.
- Growth in unfilled orders edges up to 0.6% in Oct. from 0.5% in Sept., while growth in inventories quickens to 0.5%, the fastest since May, from 0.1%.
Total factory orders rose 1.0% m/m (11.1% y/y) in October after unrevised increases of 0.3% in September and 0.2% in August, according to the U.S. Census Bureau. The October m/m rise was the 12th in 13 months. A 0.6% m/m increase for October had been expected in the Action Economics Forecast Survey. Factory orders excluding the transportation sector rebounded 0.8% (8.9% y/y), the second m/m gain in three months, following a 0.2% September decline.
Durable goods orders grew 1.1% (10.7% y/y) in October, the seventh m/m gain in eight months, after a 0.2% rise in September (+1.0% for Oct. in the advance report). The October gain reflected m/m orders increases in all the durable goods industries: 2.2% (23.2% y/y) in transportation equipment, 1.5% (6.8% y/y) in machinery, 0.5% (6.5% y/y) in electrical equipment, appliances & components, 0.5% (6.2% y/y) in computers & electronic products, 0.3% (5.0% y/y) in furniture & related products, 0.2% (2.9% y/y) in fabricated metal products, and 0.1% (2.2% y/y) in primary metals.
Total shipments grew 0.7% (10.7% y/y) in October, the 19th m/m gain in 20 months, after a 0.3% increase in September (+0.2% originally). Excluding transportation, shipments rose 0.8% (9.5% y/y), the third straight m/m rise, after a 0.1% September uptick. Shipments of durable goods industries increased 0.4% (9.9% y/y), the 14th consecutive m/m advance, on top of a 0.3% September gain. Shipments grew in some key industry groups, notably by gains of 1.4% (10.6% y/y) in machinery, 0.7% (7.5% y/y) in nonmetallic mineral products, and 0.6% (5.0% y/y) in miscellaneous durable goods. Shipments for transportation equipment (17.1% y/y), computers & electronic products (8.3% y/y), and electrical equipment, appliances & components (9.3% y/y) each increased 0.4% m/m in October. However, shipments for wood products (-0.8%; +2.7% y/y) and fabricated metal products (-0.1%; +4.6% y/y) declined m/m in October; shipments for primary metals were essentially unchanged m/m (2.5% y/y) following a 2.0% September drop.
Nondurable goods orders, which equal nondurable goods shipments, rose 1.0% (11.6% y/y) in October, the ninth meaningful m/m rise in 10 months, after a 0.3% increase in September. The October gain reflected monthly rises of 4.4% (40.7% y/y) in petroleum & coal products, 2.6% (5.3% y/y) in apparel, 1.9% (20.8% y/y) in leather & allied products, 0.5% (11.5% y/y) in printing, and 0.2% (4.0% y/y) in food products. In contrast, nondurable goods shipments for the following items registered m/m declines in October: textile products (-2.0%; +1.7% y/y), beverage & tobacco products (-0.6%; +16.7% y/y), textile mills (-0.5%; +0.7% y/y), basic chemicals (-0.3%; +2.8% y/y), and paper products (-0.1%; +0.7% y/y). Shipments for plastics & rubber products were virtually unchanged m/m (3.5% y/y) after a 0.9% September decline.
Unfilled orders increased 0.6% (7.1% y/y) in October, the 22nd straight m/m gain, after an unrevised 0.5% rise in September. Excluding transportation, unfilled orders held steady (3.7% y/y) after no change in September and a 0.3% August rise. The October gain in unfilled orders was led by 1.0% (9.6% y/y) in transportation equipment, 0.6% (10.2% y/y) in electrical equipment, appliances & components, and 0.3% (6.6% y/y) in machinery but partly offset by a 1.5% drop (-5.4% y/y) in furniture & related products.
Inventories rose 0.5% (7.4% y/y) in October, the strongest m/m pace since May, after a 0.1% uptick in September (+0.2% originally). They showed their string of increases from October 2020 to June 2022. Excluding transportation, inventories grew 0.7% (8.7% y/y) after a 0.2% September rebound. Inventories of durable goods rose 0.2% (6.7% y/y), continuing their rises since February 2021, while inventories of nondurable goods increased 1.0% (8.6% y/y) following three successive monthly decreases.
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.
More Economy in Brief
