U.S. Factory Orders Unexpectedly Fall in July for the First Time Since September
Summary
- New orders -1.0% in July following nine straight m/m rises; June revised down to +1.8%.
- Shipments decline 0.9%, led by a 1.9% drop in nondurable goods.
- Unfilled orders rise 0.7%, easing from June's 0.8%, while inventories increase a marginal 0.1%.
Total factory orders fell 1.0% m/m (+12.5% y/y) in July after rises of 1.8% in June (originally +2.0%) and 1.8% in May, according to the U.S. Census Bureau. The July m/m fall was the first since September's -0.3%. A 0.2% m/m increase for July had been expected in the Action Economics Forecast Survey. Factory orders excluding the transportation sector slid 1.1% (+11.3% y/y), the first m/m slide since April 2020, reversing June's 1.0% gain.
Durable goods orders slipped 0.14% (+10.7% y/y) in July, the first m/m decline since February, after a 2.3% gain in June (-0.02% in the advance report for July). The July easing reflected m/m orders declines of 1.7% (+4.6% y/y) in primary metals, 1.2% (+8.5% y/y) in electrical equipment, appliances & components, and 0.7% (+18.8% y/y) in transportation equipment. To the upside, orders for furniture & related products (1.7%; 3.9% y/y), fabricated metal products (1.2%; 9.3% y/y), computers & electronic products (0.8%; 7.4% y/y), and machinery (0.3%; 7.0% y/y) posted their m/m gain in July.
Total shipments fell 0.9% (+11.8% y/y) in July, the first m/m fall since February 2021, after a 0.8% gain in June. Excluding transportation, shipments decreased 1.2% (+11.9% y/y), also down for the first time since February 2021, after a 0.9% June increase. Shipments of durable goods industries rose 0.2% (9.4% y/y), the 11th straight m/m rise, on top of a 0.3% June increase. Shipments grew in some key industry groups, notably by gains of 1.1% (11.0% y/y) in transportation equipment and 0.7% (9.3% y/y) in nonmetallic mineral products. Shipments for primary metals, however, fell 2.8% (+7.5% y/y) and miscellaneous durable goods shipments fell 0.4% (+5.6% y/y); both decreased for the second straight month. Shipments for electrical equipment, appliances & components declined 2.0% (+7.4% y/y) in July following two successive m/m rises. Shipments for wood products slid 0.5% (+3.0% y/y), the fourth consecutive m/m slide.
Nondurable goods orders, which equal nondurable goods shipments, fell 1.9% (+14.3% y/y) in July, the first m/m fall since February 2021 and the deepest since April 2020, after a 1.4% gain in June. The July fall reflected monthly drops of 6.7% (+50.6% y/y) in petroleum & coal products, 1.0% (+2.1% y/y) in paper products, 0.9% (+17.0% y/y) in beverage & tobacco products, 0.7% (+2.3% y/y) in apparel, 0.7% (+5.6% y/y) in basic chemicals, and 0.2% (+8.5% y/y) in leather & allied products. In contrast, nondurable goods shipments for the following items posted m/m increases in July: printing (0.8%; 13.3% y/y), textile mills (0.6%; 0.3% y/y), plastics & rubber products (0.2%; 8.0% y/y), food products (0.1%; 4.8% y/y), and textile products (0.1%; 4.0% y/y).
Unfilled orders grew 0.7% (7.4% y/y) in July, the 19th straight m/m gain, after a 0.8% rise in June. Excluding transportation, unfilled orders rose 0.3% (6.0% y/y) after increases of 0.1% in both June and May. The July gain in unfilled orders was led by 1.1% (12.8% y/y) in electrical equipment, appliances & components, 1.0% (8.3% y/y) in transportation equipment, and 0.7% (1.8% y/y) in furniture & related products but partly offset by a 0.3% decline (-0.6% y/y) in primary metals.
Inventories ticked up 0.1% (9.9% y/y) in July after a 0.4% rise in June, continuing their string of increases since October 2020. Excluding transportation, inventories edged up 0.1% (11.5% y/y) after a 0.5% June gain. Inventories of durable goods rose 0.3% (8.8% y/y), continuing their rises since February 2021, while inventories of nondurable goods fell 0.2% (+11.6% y/y), the first m/m easing since September 2020's -0.4%.
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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