U.S. Factory Orders Posted a Modest Decline in December
Summary
- New orders for manufacturing goods dropped in December following seven consecutive monthly gains.
- Shipments were up 19 of the last twenty months.
- Both unfilled orders and inventories rose again during December.
Total factory orders declined 0.4% m/m (13.3% y/y) in December, following a 1.8% m/m (15.8% y/y) rise in November, revised up from an initial rise of 1.6% m/m (15.5% y/y). The December drop was the first monthly one since April of last year. The Action Economics Forecast Survey expected a 0.3% m/m decline. Much of the decline reflected a drop in transportation orders. Orders excluding transportation rose a modest 0.1% m/m (13.0% y/y), down from the 0.8% m/m (15.1% y/y) rise in November.
Durable goods orders dropped 0.7% m/m (13.0% y/y) during December, up from a previously published decline of 0.9% m/m (12.7% y/y) and following two consecutive monthly increases. November orders rose 3.2% m/m (15.5% y/y). Transportation equipment orders declined 3.7% m/m (14.9% y/y), revised from an initially published drop of 3.9% and following a rise of 8.2% m/m in November. Orders for computers and electronic products also declined 2.7% m/m (5.0% y/y) during December, following a 4.2% m/m rise in November. Other components posted small increases, notably primary metals orders, rising 2.1% m/m (22.9% y/y) following a slight 0.1% m/m retrenchment in November.
New orders for nondurable goods declined 0.2% m/m (13.7% y/y) in December, following a 0.5% m/m (16.1% y/y) rise in November.
Total shipments rose 0.4% m/m (11.3% y/y) in December, revised slightly up from the previously published increase of 0.3%. This follows a rise of 0.7% m/m (13.0% y/y) in November. Excluding transportation shipments, shipments increased 0.2% m/m (13.3% y/y), following a 0.5% m/m (14.8% y/y) gain in November. Shipments of durable goods rose 1.0% m/m (9.0% y/y) in December, following a 0.8% m/m (10.0% y/y) rise in November. Transportation equipment, up three consecutive months, led the overall increase, up 1.2% m/m (1.0% y/y), following a 1.4% m/m in November. Nondurable goods shipments declined 0.2% m/m (13.7% y/y), after a 0.5% m/m rise in November. Petroleum and coal products, down following seven consecutive monthly increases, drove the decrease with a 2.1% m/m (43.5% y/y) drop.
Unfilled orders increased rose 0.5% m/m (7.4% y/y) in December, after a 0.8% m/m (6.6% y/y) rise in November. They are up 11 consecutive months. Excluding transportation, unfilled orders rose 0.8% m/m (15.0% y/y), following a 0.9% m/m (15.4% y/y) rise in November. Gains were widespread, led by increases in transportation (0.3% m/m), in fabricated metals (0.8% m/m) and electric equipment and appliances (1.3% m/m).
Inventories of manufactured goods were up 18 of the last 19 months, posting a rise of 0.3% m/m (8.9% y/y) in December, following a 0.8% m/m (9.1% y/y) in November. Durable goods inventories rose 0.8% while nondurable goods inventories dropped 0.4% in December, following rises of 0.8% in both durable and nondurable goods inventories during November.
The factory sector data are available in Haver's USECON database. The Action Economics Forecast Survey is in the AS1REPNA database.
Kathleen Stephansen, CBE
AuthorMore in Author Profile »Kathleen Stephansen is a Senior Economist for Haver Analytics and an Independent Trustee for the EQAT/VIP/1290 Trust Funds, encompassing the US mutual funds sponsored by the Equitable Life Insurance Company. She is a former Chief Economist of Huawei Technologies USA, Senior Economic Advisor to the Boston Consulting Group, Chief Economist of the American International Group (AIG) and AIG Asset Management’s Senior Strategist and Global Head of Sovereign Research. Prior to joining AIG in 2010, Kathleen held various positions as Chief Economist or Head of Global Research at Aladdin Capital Holdings, Credit Suisse and Donaldson, Lufkin and Jenrette Securities Corporation.
Kathleen serves on the boards of the Global Interdependence Center (GIC), as Vice-Chair of the GIC College of Central Bankers, is the Treasurer for Economists for Peace and Security (EPS) and is a former board member of the National Association of Business Economics (NABE). She is a member of Chatham House and the Economic Club of New York. She holds an undergraduate degree in economics from the Universite Catholique de Louvain and graduate degrees in economics from the University of New Hampshire (MA) and the London School of Economics (PhD abd).
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