U.S. Factory Orders Rebounded in November with Surge in Aircraft
by:Sandy Batten
|in:Economy in Brief
Summary
- Total manufacturing orders rose a larger-than expected 2.6% m/m in November.
- However, orders excluding nondefense aircraft only edged up 0.1% m/m.
- Shipments increased 0.5% m/m while inventories edged up 0.1% m/m.
Total factory orders rebounded in November, rising 2.6% m/m (3.1% y/y) after a 3.4% monthly decline in October (revised down from 2.8% initially). A 2.1% m/m increase had been expected by the Action Economic Forecast Survey. Orders for durable goods jumped 5.4% m/m in November, more than reversing their 5.1% m/m decline in October. The unusually large swings in the past two months have been driven by outsized changes in orders for nondefense aircraft. They rebounded 80.1% m/m in November after having plunged 43.9% m/m in October. Total orders excluding nondefense aircraft edged up just 0.1% m/m in November versus a 1.2% monthly fall in October.
For durable goods orders, monthly gains apart from nondefense aircraft and transportation more generally were relatively widespread, led by a 1.2% m/m increase in orders for electrical equipment and appliances and a 1.1% m/m increase in orders for furniture. By contrast, orders for defense aircraft slumped 7.7% m/m and orders for ships and boats fell 5.9% m/m.
Orders for nondurable goods, which equal shipments, were essentially unchanged in November (actually slipped 0.03%). Orders for apparel products fell 1.3% m/m, their sixth monthly decline in the past seven months. Orders for textile products declined 1.8% m/m, their second decline in the past three months. Petroleum orders slipped 0.8% m/m in November on top of a 7.9% m/m plunge in October. By contrast, basic chemicals orders gained 0.5% m/m and orders for plastics and rubber products increased 0.6% m/m.
Total shipments rose 0.5% m/m (-0.4% y/y) following a 1.3% monthly decline in October. Durable goods shipments increased 1.0% m/m (1.8% y/y), their first monthly rise in three months. A 2.2% m/m increase in shipments of transportation equipment led the November gain in durable goods shipments. Shipments of primary metals and of fabricated metals each rose 0.8% m/m while shipments of computers increased 0.7% m/m. Shipments of nondurable goods were essentially unchanged (-2.5% y/y) in November following a 1.8% m/m decline in October.
Unfilled orders increased 1.3% m/m (8.8% y/y) in November following a 0.4% monthly gain in October. Excluding transportation, the remaining unfilled orders slipped 0.1% m/m. Unfilled transportation orders rose 2.0% m/m due solely to a 3.0% m/m rise in unfilled nondefense aircraft orders.
Total inventories increased 0.1% m/m (-0.2% y/y) in November after having been unchanged in October. Inventories of durable goods increased 0.1% m/m (1.1% y/y), their fourth consecutive monthly gain while inventories of nondurable goods also rose 0.1% m/m (-2.3% y/y) after having fallen 0.3% m/m in October.
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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