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First Cut: August factory orders down slightly on soft nondurables

New orders for factory goods were down 0.1% in August after an unrevised increase of 1.4% in July. Durable goods orders eked out a 0.2% increase in spite of soft transportation orders that fell 0.4%. Nondurables were down 0.3% due to lower prices for petroleum, as expected.

The data were little revised overall and told the same story as the September 26 advance durables orders report. Order for primary metals (up 1.6%) and fabricated metal products (up 1.2%) carried most of the weight while transportation orders (0.4%) where held back by motor vehicles (down 0.1%) and nondefense aircraft (down 17.1%) in spite of an increase in defense aircraft (up 32.6%).

Unfilled orders were little changed in August from July. Aircraft orders — which account for more than half of all unfilled orders — were flat for nondefense aircraft and up 0.4% for defense aircraft. The aircraft categories are no longer declining due to cancellation related to the air disasters of the Boeing 737 MAX. However, the lack of fresh cancellations will keep any backlog from growing in the absence of significant new orders.

Shipments continued to decline in value, although some of that was from falling prices for petroleum. Inventories were flat as businesses were cautious about allowing goods to accumulate in the face of slower economic activity.

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