Transportation Equipment Fuels Modest Rise in December Factory Orders

New factory orders for manufactured goods increased $4.1 billion or 1.1% in December following a 1.9% increase in November. New orders for manufactured durable goods increased $4.5 billion or 2.1% to $216.9 billion, revised from the previously announced 2.2% increase. Year-to-date, new orders are 7.0% above the same period a year ago.

New orders
New factory orders for manufactured goods increased $4.1 billion or 1.1% in December following a 1.9% increase in November. New orders for manufactured durable goods increased $4.5 billion or 2.1% to $216.9 billion, revised from the previously announced 2.2% increase. Year-to-date, new orders are 7.0% above the same period a year ago. Transportation equipment had the largest increase, $6.8 billion or 13.7% to $56.4 billion, mostly due to aircraft and parts. Electronic and other electrical equipment increased $0.3 billion or 0.8% to $41.2 billion, mostly due to electronic components. Primary metals, down three consecutive months, fell $0.6 billion or 3.9% to $14.2 billon; this is the largest decrease since October 1998. Industrial machinery and equipment decreased $0.53 billon or 1.1% to $41.9 billon. New orders for nondurable goods decreased $0.4 billion or 0.3% to $165.6 billion with falling oil and chemical prices mostly responsible for the decline. 

Shipments
Shipments of durable goods in December decreased $0.4 billion or 0.2% to $207.3 billion, revised from the previously published 0.5% decrease. This is the third consecutive decrease. Primary metals had the largest decrease, $0.6 billion or 3.7% to $14.6 billion, the largest decrease since June 1996. Electronic and other electrical equipment, up seven of the last ten months, increased $1.3 billon or 3.1% to $41.8 billion. Industrial machinery and equipment, down six of the last eight months, decreased $0.4 billion or 0.8% to $42.7 billion. Transportation equipment, down three consecutive months, decreased $0.3 billion or 0.8% to $45.1 billion.
Shipments of nondurable goods decreased $0.4 billion or 0.2% to $165.6 billion. Petroleum and coal products had the largest decrease, $0.7 billion or 3.3% to $20.3 billion.

Unfilled Orders
Unfilled orders for durable goods in December increased $9.6 billion or 1.7% to $572.9 billion, revised from the previously published 1.4% increase. Transportation equipment had the largest increase, $11.2 billion or 4.5% to $262.7 billion, due to aircraft and parts. Industrial machinery and equipment decreased $0.9 billion or 0.9% to $91.6 billion; decreases in computer and office equipment as well as metalworking machinery easily offset increases in engines and turbines. Electronic and other electrical equipment decreased $0.6 billion or 0.6% to $99.2 billion. Primary metals, down 13 or the last 14 months, decreased $0.3 billion or 1.1% to $29.7 billion. 

Inventories
Inventories of durable goods increased $0.8 billion or 0.2% in December to $310.4 billion. This is the ninth consecutive increase and fifteenth in the last sixteen months. Industrial machinery and equipment had the largest increase, $1.1 billion or 1.8% to $64.9 billion. This is the ninth consecutive increase and the largest since January 1995. Electronic and other electrical equipment, up eight of the last nine months, increased $0.6 billion or 1.2% to $48.4 billion. Transportation equipment, down for the first time since June, decreased $0.9 billion or 1.3% to $ 68.8 billion.
Inventories of nondurable goods decreased $0.6 billion or 0.3% to $183.1 billion. 
By stage of fabrication, December finished goods increased 1.2% in durables and 0.3% in nondurables. Work in process decreased 0.5% in durables and 0.4% in nondurables. Materials and supplies increased 0.2% in durables and decreased 1.1% in nondurables.

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