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According
to the U.S.
Census Bureau, the value of manufactured-goods shipments decreased $5.0
billion or 1.0 percent to $481.8 billion in March.
Shipments
of manufactured durable goods increased $1.1 billion or 0.5 percent to $230.4
billion, led by transportation equipment. Nondurable goods shipments decreased
$6.1 billion or 2.4 percent to $251.3 billion, led by petroleum and coal
products. Forest products shipments retreated by 0.6 (Wood) and 0.3
(Paper) percent.
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Data
from the Association
of American Railroads (AAR ) and the American Trucking Associations’ (ATA) advance
seasonally adjusted For-Hire
Truck Tonnage Index help round out the picture on goods shipments. AAR reported
a 0.8 percent decrease in not-seasonally adjusted rail
shipments in April (relative to March), and a 0.4 percent drop from a year
earlier; on a trend-line basis, total shipments were off 2.6 percent from a
year earlier. Excluding coal carloads, year-over-year shipments were down 0.2 percent.
Seasonal adjustments accentuated the 0.8 percent March-to-April decrease, expanding
it to a 1.2 percent decrease. Rail shipments of forest-related products were lower
in April than a year earlier, thanks largely to a 52.5 percent drop in lumber
and wood products shipments. The ATA’s advance index showed a 0.9 percent expansion
in March.
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Inventories
increased $0.2 billion to $620.2 billion, the highest level since the series
was first published on a NAICS basis. The inventories-to-shipments ratio was
1.29, up from 1.27 in February.
Inventories
of durable goods decreased $0.4 billion or 0.1 percent to $376.2 billion, led
by primary metals. Nondurable goods inventories increased $0.6 billion or 0.2
percent to $244.0 billion; chemical products drove the decrease. Wood inventories
rose by 1.6 percent but paper fell 0.1 percent.
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New
orders for manufactured goods decreased $19.5 billion or 4.0 percent to $467.3
billion. Excluding transportation, however, new orders new orders decreased 2.0
percent.
New
orders for durable goods decreased $13.4 billion or 5.8 percent to $216.0
billion, led by transportation equipment; it was the largest drop since August
2012, and well in excess of expectations
for a 3.2 percent decline. Nondurable goods orders decreased $6.1 billion or
2.4 percent to $251.3 billion.
“There’s
clearly rising near-term caution in capital spending plans by businesses as
fiscal tightening hits and global growth slows,” economist Ted Wieseman of
Morgan Stanley wrote in a research note.
Converting
new orders to real, inflation-adjusted terms reveals an even more-discouraging
story. On that basis, new orders have recouped only about one-half of the loss
incurred since December 2007 and are still roughly 8 percent below January 2000
levels.
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Unfilled
orders for durable goods decreased $7.1 billion or 0.7 percent to $990.1
billion, led by transportation equipment. Real (i.e., inflation adjusted)
unfilled orders, a good litmus
test for sector growth, are still in a long-term downward trend.
The foregoing comments represent the
general economic views and analysis of Delphi Advisors,
and are provided solely for the purpose of information, instruction and
discourse. They do not constitute a solicitation or recommendation regarding
any investment.
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