U.S. Factory Orders Rebounded in August
by:Sandy Batten
|in:Economy in Brief
Summary
- Total factory orders rose 1.2% m/m after a 2.1% m/m decline in July.
- Transportation orders slipped 0.3%, again led by weaker orders for nondefense aircraft.
- Durable goods orders edged up 0.1% m/m while nondurable orders jumped 2.1% m/m.
- Shipments increased 1.3% m/m, their fourth consecutive monthly gain.
Total factory orders rebounded more than expected in August, rising 1.2% m/m following a 2.1% monthly decline in July. The Action Economic Forecast Survey had looked for only a 0.2% m/m increase. Orders for durable goods edged up 0.1% m/m after a 5.6% m/m drop in July while orders for nondurable goods jumped 2.1% m/m on top of a 1.5% monthly gain in July. The August increase was the largest since March 2022. Transportation orders fell 0.3% m/m in August after a 14.9% monthly plunge in July, once again led by weak orders for nondefense aircraft (-15.9% m/m in August). Excluding transportation, the remainder of orders was up 1.4% m/m in August following a 0.9% monthly rise in July. Orders for defense goods jumped 15.1% m/m in August after a 1.7% m/m increase in July. Excluding defense, other orders increased 0.8% m/m in August after a 2.2% monthly decline in July.
Gains in durable goods orders in August were rather widely spread across major industries with only transportation (-0.3% m/m) and primary metals (-1.0% m/m) reporting declines. By contrast, furniture orders were up 2.2% m/m in August, their first monthly gain in seven months. Both machinery orders and orders for fabricated metal products rose 0.6% m/m in August.
The third consecutive monthly gain in nondurable goods orders, which equal nondurable goods shipments, was concentrated in an 8.8% m/m jump in orders for petroleum and coal products, a reflection of the ongoing rise in global crude oil prices. Excluding orders for petroleum and coal products, the remainder of nondurable goods orders rose a more modest 0.2% m/m in August, the same monthly increase as in July. Orders from textile mills, for apparel, for leather products, for paper products, and for printing each fell in August. While orders for textile products, basic chemicals, plastics, food, and beverages each rose.
The 1.3% m/m increase in total shipments was the largest monthly gain since May 2022. Durable goods shipments were up 0.5% m/m while shipments of nondurable goods increased 2.1% m/m. Shipments of transportation goods increased 0.9% m/m following two consecutive monthly declines. Excluding transportation shipments, the rest of shipments increased 1.4% m/m in August, their third consecutive monthly gain. The increase in shipments of durable goods was widely spread with only primary metals shipments and miscellaneous shipments reporting monthly declines.
Unfilled orders rose 0.4% m/m in August, their sixth consecutive monthly increase. Unfilled orders increased for primary metals, fabricated metal products, electrical equipment, and transportation equipment. They fell for machinery, computers and electronic products, and furniture.
Total inventories increased 0.3% m/m in August, their second consecutive monthly increase. Inventories of durable goods increased 0.2% m/m while inventories of nondurable goods rose 0.5% m/m, their second consecutive monthly gain after five consecutive declines.
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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