Factory Orders Increased, Boosted by Rising Prices

MBA (7/3/2008 ) Velz, Orawin
New orders for manufactured goods advanced 0.6 percent in May, following a 1.7 percent increase in April. The increase resulted solely from a 1.2 percent rise in nondurable goods shipments, which in turn was largely due to the higher value of shipments of petroleum products, coal and food.
Durable goods orders were unchanged in May after posting declines in March and April. The factory orders report included unrevised durable goods orders data released last week and contained new data on nondurable goods manufacturing shipments, inventories and unfilled orders.

The increase in nondurable goods shipments was led by petroleum shipments, which account for about 30 percent of the value of total nondurable goods shipments. Excluding petroleum, nondurable goods shipments increased 0.1 percent. Coal, food and beverage, and chemical shipments were also up while textile mill products, apparel, leather, paper and printing shipments dropped.

While the tax rebates apparently boosted consumer spending in May, more consumers were falling behind on credit payments during the first quarter. A report from the American Bankers Association’s Consumer Credit Delinquency Bulletin showed an increase in the percentage of accounts at least 30 days past due for some consumer loans.

For example, the percentage of home equity lines of credit, or HELOC, accounts that were more than 30 days past due rose 14 basis points from the fourth quarter of 2007 to 1.10 percent (seasonally adjusted)—the highest reading since ABA began collecting the series in 1987. During the same period, bank card delinquencies rose 13 basis points to 4.51 percent, slightly above the five year average delinquency rate of 4.40 percent.