Factory Shipments, Orders Reports Better Than They Appear
A new government report on U.S. manufactured shipments and orders for February is the latest in a recent string of economic numbers that sound worse than they really are.

If you take out the volatile, often big-ticket transportation sector, manufacturing numbers look a lot better.

If you take out the volatile, often big-ticket transportation sector, manufacturing numbers look a lot better.
A new government report on U.S. manufactured shipments and orders for February is the latest in a recent string of economic numbers that sound worse than they really are.
The U.S. Commerce Department says shipments of all manufactured goods fell in January for the second consecutive month, dropping by 0.2% following a slight December drop. For the subset of durable goods, revised figures show shipments in January were down 1.2% from the month before, the same as reported earlier, while December showed a 0.6% hike.
New orders of all manufactured goods fell in January for the second of the past three months by 2%. That number was pulled lower by a big drop in new transportation orders, driven by a steep decline in aircraft and volatile defense orders. When you exclude those from the overall number, manufactured goods actually show a 1.3% gain.
Similarly, while new orders for durable goods in January fell 4.9% following four straight months of increases, that number was pulled down by a near 20% drop in new transportation orders. New orders for manufactured non-durable goods, those designed to last less than three years, increased 0.6% in the first month of the year.
One analyst told Bloomberg News that manufacturing is looking better than it did in the second half of 2012.
Other Numbers Looking Good
This report follows one from the Institute of Supply Management last week showing economic activity in the manufacturing sector expanded in February for the third consecutive month, and the overall economy grew for the 45th consecutive month.
Another recent economic gauge shows a decline in U.S. construction spending in January falling 2.1% from the month before, when December recorded a 1.1% gain. Despite the biggest drop since July 2011, it’s expected to move higher as the year progresses. Last year U.S. construction spending increased nearly 10% from 2011’s level.
As for consumers, their confidence in the U.S. improved in February by 5.1% from January and just over 3% higher from the same time a year ago, according to the Thomson Reuters/University of Michigan index released last week. It was higher than a consensus of economists were predicting.
Finally, Gross Domestic Product, the closely watched measure of the nation’s total output of good and services, was revised slightly upward. The Commerce Department said a few days ago that GDP in the fourth quarter of 2012 increased at an annual rate 0.1% after first reporting a drop of 0.1%. The figure is far below the annual level of 3.1% reported during the third quarter of last year, however for all of 2012 it grew 2.2%, following a level of 1.8% for 2011. A third and final report on the GDP for the final quarter of last year is expected out soon.
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