Factory orders rose for only the second time in eleven months, in line with the Consensus Estimate.
Factory orders rose nearly as expected in June, up 1.8 percent for only the second gain in the last 11 months. The durable goods component, initially released last week, is unrevised at plus 3.4 percent in a gain distorted by aircraft orders but one that does reflect a pop higher for capital goods. The non-durables component, data released with today’s report, rose 0.4 percent on order gains for oil and chemicals.
Orders for civilian aircraft jumped 65 percent in the month following, in routine up-and-down fashion for this component, a 32 percent downswing in May. Industries reporting respectable gains include 0.5 percent for furniture and 0.6 percent for motor vehicles as well as a 1.5 percent gain for machinery. Orders for energy equipment bounced back 5.5 percent after sinking 25 percent in May. Year-on-year, energy equipment is down 51 percent.
Looking at totals again, shipments rose a very solid 0.5 percent with shipments of core capital goods up 0.3 percent. The latter, which is a key reading that excludes aircraft, isn’t spectacular but is still a solid gain for business investment. Unfilled orders, which have been in contraction most of the year, were unchanged in June. Inventories rose 0.6 percent in a build that falls in line with shipments, keeping the inventory-to-shipments ratio at a manageable 1.35.
Chart Perspective On the Bounce
This was a decent but not spectacular report and only the second in nearly a year. A chart of new orders and shipments provides a good perspective.
Here are a few more charts from Fred, all showing notable weakness on a yeaa-over-year basis.
Durable Goods New Orders
Export New Orders Excluding Motor Vehicles
New Orders for Nondurable Goods
New Orders Excluding Transportation
Year-over-year new orders were down once again, in many ways.
Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com