The advance reports five days ago set the tone for this report. Yet there was an unusually wide guess from Econoday economists where the range of estimates was from -3.0% to +0.6%. The consensus must have been paying attention to the advance report as they were nearly on the mark at 0.0%.

The monthly full report of Manufacturers' Shipments, Inventories, and Orders for January 2019, shows order rose 0.1%.

Summary

New orders for manufactured goods in January, up two consecutive months, increased $0.3 billion or 0.1 percent to $500.5 billion, the U.S. Census Bureau reported today. This followed a 0.1 percent December increase. Shipments, down four consecutive months, decreased $1.8 billion or 0.4 percent to $503.1 billion. This followed a 0.2 percent December decrease. Unfilled orders, up following three consecutive monthly decreases, increased $1.4 billion or 0.1 percent to $1,181.9 billion. This followed a 0.1 percent December decrease. The unfilled orders‐to‐shipments ratio was 6.57, up from 6.55 in December. Inventories, up twenty‐six of the last twenty‐seven months, increased $3.6 billion or 0.5 percent to $685.7 billion. This followed a 0.1 percent December increase. The inventories‐to‐shipments ratio was 1.36, up from 1.35 in December.

New Orders

New orders for manufactured durable goods in January, up three consecutive months, increased $0.9 billion or 0.3 percent to $255.3 billion, down from the previously published 0.4 percent increase. This followed a 1.3 percent December increase. Transportation equipment, up five of the last six months, drove the increase, $1.1 billion or 1.2 percent to $91.0 billion. New orders for manufactured nondurable goods decreased $0.5 billion or 0.2 percent to $245.2 billion.

Shipments

Shipments of manufactured durable goods in January, down following two consecutive monthly increases, decreased $1.3 billion or 0.5 percent to $257.9 billion, unchanged from the previously published decrease. This followed a 0.7 percent December increase. Transportation equipment, also down following two consecutive monthly increases, led the decrease, $1.2 billion or 1.3 percent to $90.1 billion. Shipments of manufactured nondurable goods, down three consecutive months, decreased $0.5 billion or 0.2 percent to $245.2 billion. This followed a 1.1 percent December decrease. Chemical products, down following five consecutive monthly increases, led the decrease, $0.3 billion or 0.5 percent to $66.5 billion.

Unfilled Orders

Unfilled orders for manufactured durable goods in January, up following three consecutive monthly decreases, increased $1.4 billion or 0.1 percent to $1,181.9 billion, unchanged from the previously published increase. This followed a 0.1 percent December decrease. Transportation equipment, also up following three consecutive monthly decreases, led the increase, $0.9 billion or 0.1 percent to $811.6 billion.

Inventories

Inventories of manufactured durable goods in January, up twenty‐four of the last twenty‐five months, increased $1.9 billion or 0.5 percent to $417.2 billion, up from the previously published 0.4 percent increase. This followed a 0.3 percent December increase. Transportation equipment, up four of the last five months, led the increase, $1.2 billion or 0.9 percent to $132.6 billion. Inventories of manufactured nondurable goods, up following two consecutive monthly decreases, increased $1.8 billion or 0.7 percent to $268.5 billion. This followed a 0.4 percent December decrease. Petroleum and coal products, up following three consecutive monthly decreases, led the increase, $1.3 billion or 3.5 percent to $39.2 billion. By stage of fabrication, January materials and supplies increased 0.6 percent in durable goods and increased 0.7 percent in nondurable goods. Work in process increased 0.3 percent in durable goods and increased 0.9 percent in nondurable goods. Finished goods increased 0.5 percent in durable goods and increased 0.6 percent in nondurable goods.

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Core Capital Orders

Economists follow core capital orders, nondefense capital goods excluding aircraft, the line in green on the top graph. It;s a measure of a potential increase in capital spending to increase production.

Econoday commented "There is good news in today's report, actually a repeat of good news in last week's advance report on the durables side of this report. Capital goods orders (nondefense ex-aircraft), which are themselves an advance barometer for business investment, snapped out of the doldrums with a 0.8 percent January surge and are unrevised from last week's data. Shipments for this reading are also unrevised at 0.8 percent in January which is a promising opening for first-quarter equipment investment in the GDP report."

On the above chart and it's barely noticeable. Let's check in isolation because the numbers are small.

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Core Capital Orders hardly seem worth crowing about.

Shipments vs New Orders Year-Over-Year

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Spikes in new orders, in both directions, are due to huge volatility in aircraft orders.

Shipments and new orders have been trending lower since August 2018.

Mike "Mish" Shedlock

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