September 2010 Manufacturers’ Shipments, Inventories and New Orders

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Shipments, inventories and new orders at the total manufacturing level all posted gains in September, according to the U.S. Census Bureau.
 

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Shipments, up two of the last three months, increased $1.7 billion (0.4 percent) to $418.2 billion. Durable goods shipments decreased $0.3 billion (0.1 percent) to $198.2 billion -- led by computer and electronic products -- but nondurable goods increased $1.9 billion (0.9 percent) to $220.0 billion. Chemical products led the increase in nondurable shipments.

Shipments of solid wood products declined by 1.7 percent, while paper products increased by 0.6 percent.
 

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Data from the Association of American Railroads indicated double-digit monthly percentage gains in rail shipments during September. But, the Ceridian-UCLA Pulse of Commerce Index (which measures diesel consumption of over-the-road trucking) fell by 0.5 percent. "The PCI tells us that inventory is stalled on the nation's thoroughfares," said Ed Leamer, chief PCI economist and director of the UCLA Anderson Forecast. "The good months of growth are now seemingly in our rear view mirror. Our economy's loss in traction is alarming and for the ‘Cassandras of the double-dip,' may foretell a coming decline in GDP and spike in unemployment. However, with residential investment, consumer durables, business spending, and other component indicators already at or near record lows relative to GDP, it remains unlikely that we will experience an outright decline into recession."
 

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Inventories, up eight of the last nine months, increased $3.5 billion (0.7 percent) to $531.2 billion. Durable goods inventories increased $1.5 billion (0.5 percent) to $314.7 billion; transportation equipment experienced the largest increase. Inventories of nondurable goods increased $1.9 billion (0.9 percent) to $216.4 billion, led by petroleum and coal products.

Inventories of both wood and paper products increased by 0.2 percent in September.
 

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New orders constitute the forward-looking portion of the Census Bureau’s report, and give an indication of what may be in store for the manufacturing sector. New orders for manufactured goods increased $8.8 billion (2.1 percent) to $420.0 billion in September. Excluding transportation, new orders increased 0.4 percent.

Durable goods orders increased $6.8 billion (3.5 percent) to $200.0 billion, led by transportation equipment. New orders for manufactured nondurable goods increased $1.9 billion (0.9 percent) to $220.0 billion.