U.S. Factory Orders Rise Stronger Than Expected in June
Summary
- New orders +2.0% in June vs. +1.8% in May, up for the ninth straight month; May orders revised up.
- Shipments gain 1.1% with rises of 2.0% in nondurable goods and 0.3% in durable goods.
- Inventories increase at a slower pace while unfilled orders rise at a faster pace.
Total factory orders rose 2.0% m/m (14.2% y/y) in June after rises of 1.8% in May (originally +1.6%) and 0.7% in April, according to the U.S. Census Bureau. The June rise registered the ninth consecutive monthly gain and the 13th in 14 months (-0.3% in September). A 1.1% m/m June increase had been expected in the Action Economics Forecast Survey. Factory orders excluding the transportation sector increased 1.4% (13.3% y/y) after a 1.8% May advance, continuing their string of gains since March 2021.
Durable goods orders increased 2.0% (11.0% y/y) in June after a 0.8% gain in May (+1.9% in the advance report for June), reflecting monthly orders rises of 5.2% (19.1% y/y) in transportation equipment, 2.8% (7.6% y/y) in electrical equipment & parts, 1.7% (6.1% y/y) in computers & electronic products, 1.2% (2.4% y/y) in furniture & related products, 0.3% (6.2% y/y) in fabricated metal products, and 0.1% (9.5% y/y) in machinery. Orders for primary metals, however, fell 1.0% (+10.8% y/y) in June, the first monthly fall since February, after a 1.9% advance in May.
Total shipments rose 1.1% (14.8% y/y) in June, the 16th straight m/m rise, after a 2.1% gain in May. Excluding transportation, shipments grew 1.4% (14.5% y/y) after a 2.0% May increase. Shipments of durable goods industries were up 0.3% (12.2% y/y), the 10th successive m/m rise, on top of a 1.5% May increase. Shipments gained in most key industry groups, notably by increases of 1.4% (7.3% y/y) in computers & electronic products and 1.3% (12.6% y/y) in electrical equipment, appliances & components. Shipments for wood products, however, slid 1.3% (+2.1% y/y), the third consecutive m/m slide; shipments for furniture & related products fell 1.0% (+6.1% y/y), the first monthly fall since December. Transportation equipment shipments held steady (+16.4% y/y) in June following three straight monthly gains.
Nondurable goods orders, which equal nondurable goods shipments, rose 2.0% (17.5% y/y) in June, the sixth consecutive m/m gain, on top of a 2.7% advance in May. The June rise reflected monthly increases of 6.0% (63.0% y/y) in petroleum & coal products, 3.3% (17.4% y/y) in beverage & tobacco products, 1.6% (11.9% y/y) in printing, 1.2% (3.5% y/y) in apparel, 1.1% (8.1% y/y) in basic chemicals, and 0.2% (4.7% y/y) in food products. In contrast, nondurable goods shipments for the following items posted m/m declines in June: leather & allied products (-4.3%; +13.5% y/y), textile products (-1.4%; +4.7% y/y), textile mills (-0.8%; +2.3% y/y), and paper products (-0.2%; +3.9% y/y). Shipments for plastic & rubber products were virtually unchanged (+9.3% y/y) in June after a 0.4% decline in May and 14 successive m/m rises.
Unfilled orders grew 0.7% (7.0% y/y) in June, the 18th straight m/m gain, after a 0.3% increase in May. Excluding transportation, unfilled orders ticked up 0.1% (6.7% y/y) for the second month. The June gain in unfilled orders was led by rises of 1.2% (7.2% y/y) in transportation equipment, 0.5% (10.6% y/y) in machinery, and 0.5% (4.1% y/y) in furniture & related products but partly offset by a 1.2% drop (+1.1% y/y) in primary metals.
Inventories increased 0.4% (10.5% y/y) in June after a 1.3% rise in May, continuing their string of increases since October 2020. Excluding transportation, inventories rose 0.5% (12.2% y/y) after a 1.6% May gain. Inventories of durable goods rose 0.4% (9.2% y/y) and inventories of nondurable goods rose 0.4% (12.5% y/y).
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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