MNI DATA ANALYSIS: US July Factory Orders Fall 0.8%>

--Factory Inventories +0.8%; Business Inventories Tracking +0.6%

By Shikha Dave and Harrison Clarke

     WASHINGTON (MNI) - The value of new factory orders fell 0.8% in 

July, below the 0.6% decrease expected by analysts in an MNI survey, 

data released by the Commerce Department Thursday morning showed. 

     Durable goods orders were unrevised from the 1.7% decrease reported 

in the advance estimate. Nondurable goods orders rose 0.2% on gains in 

textiles and beverages. Nondurable goods new orders are equivalent to 

nondurable goods shipments in this report. 

     Factory orders excluding transportation were up 0.2% in the month 

following a 0.4% gain in June, continuing the string of gains that 

stretches back virtually uninterrupted for most of the past two years. 

Durables orders excluding transportation were revised down to a 0.1% 

rate from the 0.2% gain in the advance report. 

     In addition, unfilled orders were flat in July, showing steady 

demand for products. 

--TRANSPORTATION ORDERS FALL

     Transportation orders fell 5.2% in July, a upward revision from the 

5.3% decrease in the advance estimate, still driven by sharp aircraft 

declines offset by a gain in motor vehicles orders. The unlisted 

transportation components were up 4.8% in the month, based on an MNI 

calculation. 

     Nondefense capital goods new orders fell by 4.5%, however they were 

up 1.6% when excluding aircraft. 

--INVENTORIES RISE, SHIPMENTS FLAT

     Factory inventories rose by 0.8% in July. In addition to this, the 

Commerce Department's advance report on inventories showed a 0.7% gain 

for wholesale inventories and a 0.4% rise in retail inventories. 

     While these data are eligible for revision, the levels as they 

stand now, combined with the 0.8% rise in factory inventories, would 

result in a 0.6% gain in July business inventories when that report is 

released on September 14, an MNI calculation showed. The revised 

wholesale data for July will be released on September 11 and could alter 

this projection. 

     Overall factory shipments were flat in the month on a 0.2% decrease 

for durable goods shipments, offset by a 0.2% rise in nondurable 

shipments. Nondefense capital goods shipments posted a decline of 4.2%, 

but were up 1.0% after excluding the civilian aircraft component. 

     Given the mix of inventories and shipments reported Thursday, the 

inventory-to-shipments ratio rose to 1.35 in July from 1.34 in June. 

     ** MNI Washington Bureau: 202-371-2121 ** 

[TOPICS: MAUDS$,M$U$$$]