U.S. Factory Orders Rebound in July
by:Sandy Batten
|in:Economy in Brief
Summary
- Total orders rose 5.0% m/m in July after a 3.3% decline in June.
- Aircraft orders surged more than 4385% after having plummeted in June.
- Total shipments increased 0.9% m/m.
- Unfilled orders rose 0.2% m/m; inventories edged up 0.1% m/m.
Total factory orders rebounded in July, rising 5.0% m/m (2.2% y/y) after having fallen 3.3% m/m in June. A 4.9% increase had been expected in the Action Economics Forecast Survey. The June decline and the July rebound were due completely to swings in aircraft orders. Aircraft orders rebounded by more than 4385% m/m in July after plummeting 97% m/m in June. Excluding aircraft, orders were essentially unchanged in July and edged up 0.1% m/m in June. Orders excluding transportation rose 0.4% m/m in July (2.1% y/y) after a 0.1% m/m gain in June.
Again, reflecting the swing in aircraft orders, durable goods orders jumped 9.8% m/m (1.3% y/y) July following a 6.9% m/m decline in June. Transportation equipment orders surged 34.7% m/m in July after a 20.6% m/m decline in June. Apart from transportation, other orders were generally soft. Orders for primary metals fell 0.9% m/m in July, their third consecutive monthly decline; machinery orders declined 0.2% m/m; orders for computers and electronic products decreased 0.3%; and orders for electrical equipment and appliances fell 0.6% m/m.
Nondurable goods orders, which equal nondurable goods shipments, rose 0.8% m/m (+3.0% y/y) in July after having been unchanged in June. The July gain was led by a 1.1% m/m increase in petroleum and coal products. Chemical products orders increased 0.7% m/m while orders both for paper products and for food products increased 0.6% m/m. By contrast, orders for textiles fell 0.8% m/m and orders for apparel declined 0.7% m/m.
Total shipments increased 0.9% m/m (2.9% y/y) in July after posting a 0.6% m/m gain in June. Shipments of durable goods increased 1.1% m/m (2.8% y/y) in July on top of a 1.2% monthly increase in June. Again, the rebound in transportation shipments (in fact, just aircraft) was the primary factor behind the overall increase. Apart from aircraft shipments, the remaining shipments were lackluster in July (+0.1% m/m), led by a 1.0% m/m decline in auto shipments, a 7.4% m/m drop in light truck shipments, and a 0.7% m/m decrease in both machinery shipments and furniture shipments.
Unfilled orders edged up 0.2% (4.2% y/y) in June after falling 1.4% m/m in June. Excluding unfilled transported orders, the remaining unfilled orders were unchanged in July. Unfilled transportation orders increased 0.3% m/m in July following a 2.2 m/m decline in June. There are no unfilled orders for nondurable goods.
Inventories increased 0.1% (0.8% y/y) in July following a 0.1% m/m decline in June. Inventories of durable goods edged up 0.1% m/m in July while inventories of nondurable goods were essentially unchanged.
The factory sector data are available in Haver’s USECON database. The Action Economics Forecast Survey is in the AS1REPNA database.
Sandy Batten
AuthorMore in Author Profile »Sandy Batten has more than 30 years of experience analyzing industrial economies and financial markets and a wide range of experience across the financial services sector, government, and academia. Before joining Haver Analytics, Sandy was a Vice President and Senior Economist at Citibank; Senior Credit Market Analyst at CDC Investment Management, Managing Director at Bear Stearns, and Executive Director at JPMorgan. In 2008, Sandy was named the most accurate US forecaster by the National Association for Business Economics. He is a member of the New York Forecasters Club, NABE, and the American Economic Association. Prior to his time in the financial services sector, Sandy was a Research Officer at the Federal Reserve Bank of St. Louis, Senior Staff Economist on the President’s Council of Economic Advisors, Deputy Assistant Secretary for Economic Policy at the US Treasury, and Economist at the International Monetary Fund. Sandy has taught economics at St. Louis University, Denison University, and Muskingun College. He has published numerous peer-reviewed articles in a wide range of academic publications. He has a B.A. in economics from the University of Richmond and a M.A. and Ph.D. in economics from The Ohio State University.
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