Factory Inventories Hit Record Highs (Again)
New orders for manufactured goods increased 2.1% to $485 billion in May, according to a Commerce Department report (link opens as PDF) released today.
After bumping up a revised 1.3% for April, these newest numbers managed to just beat analyst expectations of a 2% increase.
Source: Commerce Department.
As a potential sign of some faith in the economic recovery, new orders for manufactured durable goods increased 3.7% to $231.2 billion. But although overall numbers are positive, orders continue to be primarily propped up by major gains in the transportation sector.
Transportation equipment recorded a 10.9% increase for May (mostly due to commercial aircraft orders), and sales are up three of the last four months. Excluding this sector from the report, new orders clock in with a more subtle 0.6% gain.
Shipments recorded a 1% increase after declining 0.7% in April, while unfilled orders topped the $1 trillion mark on a 0.8% increase.
Inventories pushed higher for the sixth straight month, reaching a new record since 1992, when data was first collected in this format. Even so, May's increase in shipments offset inventories growth, easing the inventories-to-shipment ratio down to 1.30 from April's 1.31 reading.
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