• 387 days Could Crypto Overtake Traditional Investment?
  • 392 days Americans Still Quitting Jobs At Record Pace
  • 394 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 397 days Is The Dollar Too Strong?
  • 397 days Big Tech Disappoints Investors on Earnings Calls
  • 398 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 400 days China Is Quietly Trying To Distance Itself From Russia
  • 400 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 404 days Crypto Investors Won Big In 2021
  • 404 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 405 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 407 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 408 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 411 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 412 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 412 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 414 days Are NFTs About To Take Over Gaming?
  • 415 days Europe’s Economy Is On The Brink As Putin’s War Escalates
  • 418 days What’s Causing Inflation In The United States?
  • 419 days Intel Joins Russian Exodus as Chip Shortage Digs In
  1. Home
  2. Markets
  3. Other

Factory Orders -1.5%: Searching for 'Signs of Life'

Factors orders for June declined 1.5% just a bit better than the Bloomberg Consensus estimate of -1.8%, but May was revised lower from -1.0% to -1.2%.

Economists pretty much got this number correct, but don't give them much credit.  They had a big clue from the advance durable goods report, down 4.0%.

Highlights

Anecdotal reports on the factory sector have shown isolated strength that actual government data have yet to show. Factory orders fell a sizable 1.5 percent in June following a downward revised 1.2 percent decline in May. Core capital goods (nondefense ex-aircraft) have been especially weak though orders did rise 0.4 percent in June. Shipments for this category, however, slipped 0.2 percent following a downward revised 0.7 percent decline in June in readings that will not boost revision estimates for second-quarter GDP.

Orders for nondurable goods were a plus in June, rising 1.0 percent but reflect price effects tied to energy products. Durable goods fell 3.9 percent in the month which is one 1 tenth lower than last week's advance report for this component. Orders for computers & electronics were especially weak in the month as were orders for transportation equipment with civilian aircraft, which is always volatile month to month but nevertheless has been weakening on trend, falling 59 percent. Vehicles are a plus in the report, with orders up 3.2 percent.

A major negative in the report is a 0.8 percent drop in total unfilled orders where contraction is a negative for factory employment. Total shipments are a positive, up 0.7 percent in a gain that may not be repeated should orders stay weak. A plus is that inventories edged lower, pulling down the inventory-to-shipment ratio to 1.35 from 1.36.

The factory sector, held down by weak exports and weak business investment centered in energy, has shown isolated signs of life but has yet to pull its weight so far this year.


Year-Over-Year Shipment Comparisons

  • All manufacturing: -2.8%
  • Excluding Transportation: -3.8%
  • Excluding Defense: -3.0%
  • Durable Goods: -0.5%
  • Transportation: +2.3%
  • Nondurable Goods: -5.1%

Transportation is a subcomponent of durable goods.

Within transportation, automobiles actually declined 7.0% with light trucks and utility vehicles up 7.1%. Heavy duty trucks fell 12.6%. Motor vehicle bodies, parts, and trailers rose 10.4%.


Year-Over-Year New Orders Comparisons

  • All manufacturing: -2.6%
  • Excluding Transportation: -3.6%
  • Excluding Defense: -3.0%
  • Durable Goods: +0.0%
  • Transportation: +2.4%
  • Nondurable Goods: -5.1%

The "isolated" signs of life are within the transportation sector.


Durable Goods New Orders

Durable Goods New Orders


Core Capital Goods New Orders

Core Capital Goods New Orders


Core Capital Goods Percent Change From Year Ago

Core Capital Goods Percent Change From Year Ago

Core capital goods are inputs into the nonresidential investment component of GDP.

 

Back to homepage

Leave a comment

Leave a comment