MNI DATA ANALYSIS: US June Factory Orders Rise 0.7%>

--Factory Inventories +0.1%; Business Inventories Tracking +0.1%

By Kevin Kastner, Shikha Dave, and Harrison Clarke

     WASHINGTON (MNI) - The value of new factory orders rose 0.7% in 

June, above the 0.4% increase expected by analysts in an MNI survey, 

data released by the Commerce Department Thursday morning showed. 

     Durable goods orders were revised down to a 0.8% gain from the 1.0% 

increase reported in the advance estimate. Nondurable goods orders rose 

0.5% on an increase in chemical products.  Nondurable goods new orders 

are equivalent to nondurable goods shipments in this report. 

     Factory orders excluding transportation were up 0.4% in the month 

following a 0.8% gain in May, 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 0.2% 

rate from the 0.4% gain in the advance report. 

     In addition, unfilled orders were up 0.4% in June, showing an 

increase of pent-up demand for products that may increase production in 

the coming months. 

--TRANSPORTATION ORDERS INCREASE

     Transportation orders rose 2.1% in June, a downward revision from 

the 2.2% increase in the advance estimate, but still driven by defense 

aircraft and parts, which were up 20.2%. At the same time, nondefense 

aircraft and parts orders were up 4.2% and motor vehicle orders were up 

0.9%. The unlisted transportation components were up 2.5% in the month, 

based on an MNI calculation. 

     Nondefense capital goods new orders rose by 1.9%, however it was 

up 0.2% when excluding aircraft. Civilian aircraft capital goods were 

up 15.7% following a 21.0% decrease in May. 

--INVENTORIES, SHIPMENTS RISE

     Factory inventories rose by 0.1% in June. In addition to this, the 

Commerce Department's advance report on inventories showed a flat 

reading for both wholesale and retail inventories.

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

stand now, combined with the 0.1% rise in factory inventories, would 

result in a 0.1% gain in June business inventories when that report is 

released on August 15, an MNI calculation showed. The revised wholesale 

data for June will be released on August 9 and could alter this 

projection. 

     Overall factory shipments were up 1.0% in the month on a 1.5% 

increase for durable goods shipments and a 0.5% rise in nondurable 

shipments. Nondefense capital goods shipments posted a gain of 2.0%, 

but were up 0.7% after excluding the civilian aircraft component. 

     Given the mix of inventories and shipments reported Thursday, the 

inventory-to-shipments ratio fell to 1.33 in June. 

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

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