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ANALYSIS: US August Factory Orders Rise 1.2%; Ex-Trans +0.4%>

--Factory Inventories +0.4%; Business Inventories Tracking +0.7%
By Sara Haire and Holly Stokes
     WASHINGTON (MNI) - The value of new factory orders rose by 1.2% in 
August, rising slightly higher than the expected +0.9% by analysts from 
an MNI survey. Nondurable goods orders rose 0.4%, but durable goods 
orders were revised up to a 2.0% increase, data released by the Commerce 
Department Thursday morning showed. 
     Petroleum and coal products shipments rose by 2.2% in August, 
leading the increase in nondurables orders. Nondurables shipments are 
equivalent to orders in this report. 
     Total factory orders excluding transportation rose 0.4% in 
August, while durable goods orders excluding transportation were up
0.5%, revised up from the 0.2% increase in the advance estimate. 
     The August transportation orders saw a rise of 5.1% based on 
Thursday's data, up slightly from the 4.9% from the advance 
estimate from the durables report released September 27. Nondefense 
aircraft orders rose by 44.8% in August and defense aircraft orders 
were down 24.3%. Motor vehicles orders rose 0.7% in August, while 
orders for ships and boats fell by 2.3%. 
     Nondefense capital goods new orders rose by 4.9%, but were up only 
1.1% when a 72.3% increase in the civilian aircraft capital goods 
category is excluded. 
     Overall factory shipments were up 0.5% in the month due to a 0.5% 
rise in durable goods shipments and a 0.4% increase in nondurables 
shipments. Shipments for nondefense capital goods fell 1.1% and were up 
1.1% excluding aircraft component. 
     Factory inventories were up 0.4% in the month, compared with the 
0.5% increase in shipments, making the inventory-to-shipments ratio to 
remain at 1.38. 
     The Commerce Department's advance report on inventories showed a 
1.0% gain for wholesale inventories and a 0.7% gain for retail 
inventories. While these data are eligible for revision, the levels as 
they stand now, combined with Thursday's factory inventory data, would 
result in a 0.7% increase in August business inventories when that 
report is released on October 13, an MNI calculation showed. The revised 
wholesale data for August will be released on October 6 and could alter 
this projection. 
     ** MNI Washington Bureau: 202-371-2121 ** 

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