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According
to the
U.S.
Census Bureau, the value of manufactured-goods shipments increased $0.3
billion or 0.1 percent to $489.3 billion in October. Shipments of durable goods
increased $0.9 billion or 0.4 percent to $233.7 billion (the highest level
since the series was first published on a NAICS basis), led by transportation
equipment. Meanwhile, nondurable goods shipments decreased $0.6 billion or 0.2
percent to $255.6 billion, led by petroleum and coal products.
Wood
shipments were up 0.2 percent while Paper shipments declined by 0.2 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 24.5 percent increase in
not-seasonally adjusted rail
shipments in October (relative to September), and a 1.5 percent rise from a
year earlier; on a trend-line basis, total shipments were up 2.2 percent from a
year earlier. Excluding coal carloads, year-over-year shipments were up 6.0 percent.
Seasonal adjustments cut the 24.5 percent September-to-October rise to a 1.0
percent drop. Rail shipments of forest-related products were higher in September
than a year earlier, thanks largely to a 10.1 percent rise in primary forest products
shipments. The ATA’s advance index showed a seasonally adjusted 2.8 percent decrease
in October, the first decrease since July.
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Inventories
increased $0.4 billion or 0.1 percent to $633.5 billion (also the highest level
since the series was first published on a NAICS basis). The inventories-to-shipments
ratio was unchanged at 1.29 in October.
Inventories
of durable goods increased $1.0 billion or 0.3 percent to $383.3 billion, again
led by transportation equipment. Nondurable goods inventories decreased $0.6
billion or 0.2 percent to $250.1 billion, led by chemical products. Wood
inventories rose by 0.6 percent, and Paper inventories declined by 0.6 percent.
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New
orders decreased $4.4 billion or 0.9 percent to $486.9 billion; excluding
transportation, new orders increased slightly. Durable goods orders decreased
$3.8 billion or 1.6 percent to $231.4 billion, led by transportation equipment.
New orders for nondurable goods decreased $0.6 billion or 0.2 percent to $255.6
billion. Non-defense capital goods dropped by 3.4 percent, the largest drop
since July; also, defense capital goods orders tumbled 15.8 percent (almost
completely reversing a 19.1 percent rise in September).
As
can be seen in the graph above, real (inflation-adjusted) new orders have been
essentially flat since early 2011, and have recouped only about half the losses
incurred since the beginning of the Great Recession.
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Unfilled
durable-goods orders increased $4.1 billion or 0.4 percent to a new nominal
high of $1,046.2 billion, led by transportation equipment. The unfilled
orders-to-shipments ratio was 6.39, up from 6.38 in September. Real unfilled
orders, a good
litmus
test for sector growth, show a much different picture; in real terms,
unfilled orders have regained a little over half the ground given up since the
Great Recession began.
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.
