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Data: Census Bureau, FRED; Chart: Axios Visuals

Orders for durable goods stalled unexpectedly in July. But manufacturers have plenty of backlogs to work through.

Why it matters: There are a lot of businesses across the economy with empty shelves as they wait for manufacturers to ship the goods. This has been crimping sales while also driving inflation.

  • Order backlogs offer a snapshot of how much stuff manufacturers have yet to deliver.

By the numbers: Unfilled orders — the backlog — of manufactured goods grew 0.3% month over month to $1.23 trillion in July, according to Census Bureau data released Wednesday.

  • This was the sixth consecutive month of gains.
  • The backlog of core capital goods orders climbed to a record-high $230.9 billion.

What they’re saying: “Huge order backlogs will keep manufacturers busy,” ING chief international economist James Knightley says. “With customer inventories at all-time lows, manufacturers are also gaining pricing power and this can already be seen in numerous surveys of prices received.”

  • “Backlogs in the manufacturing sector are expected to take well into 2022 to clear,” Grant Thornton chief economist Diane Swonk says.

Between the lines: While this may sound good from a demand perspective, the pressure is high for manufacturers to compete.

  • “When it comes to unfilled orders for manufacturers, it’s like being a bartender on a super busy night,” Tim Quinlan, Wells Fargo senior economist, tells Axios. “It’s good in the sense that you are three deep at the bar.”
  • “But it can be bad if you’re out of lime wedges, you're running out of booze and your other bartender called in to tell you he just took another job. You’re slammed, but your customers are gonna find another place for a drink if you can’t pick up the pace."

Zoom out: UBS U.S. economist Sam Coffin notes that while unfilled orders have been on the rise, shipments of goods have risen even faster.

  • “The ratio of unfilled orders to shipments surged during the pandemic amid supply constraints,” he tells Axios. “It has fallen back to a more normal ratio and does not look particularly high or low, in aggregate, now.”
  • In fact, shipments climbed 2.2% month over month to a record-high $257.8 billion in July.

The bottom line: The good news for manufacturers is they have a lot of stuff to make. The good news for their customers is that this stuff is getting manufactured and shipped at an increasing rate.

Go deeper

Sep 17, 2021 - Health

Retail sales increase despite low expectations from Delta

Data: FRED; Chart: Axios Visuals

Consumers defied expectations and shopped at an increasing rate amid a resurgence in COVID-19 cases.

Why it matters: Several measures of consumer confidence fell sharply in August, suggesting consumer spending could fall during the month. In fact, concerns about the Delta variant's impact on the economy had prominent Wall Street economists cutting their expectations for Q3 GDP growth.

Updated 18 mins ago - Sports

MLB headed for first lockout since '95 as deal expires

Baseball Commissioner Rob Manfred (L) and Major League Baseball Players Association executive director Tony Clark. Photo: Matt King/MLB via Getty Images

Major League Baseball's collective bargaining agreement expired at 11:59 p.m. ET Wednesday without a new deal in place.

Why it matters: With no CBA, the MLB is headed for the first management lockout since a 1994-95 strike led to the cancelation of the World Series for the first time in 90 years.

Media giants back Bannon's bid to release Jan. 6 documents

Former Trump adviser Steve Bannon at the FBI Washington Field Office in Washington, DC., in November. Photo: Win McNamee/Getty Images

A coalition of news outlets including the Washington Post is supporting Stephen Bannon's campaign for the release of documents related to his contempt of Congress charges, WashPost confirmed Wednesday.

Why it matters: WashPost, the New York Times, CNN, NBC, the Wall Street Journal's parent company and others filed a motion arguing that a proposed protective order seeking to prevent the documents from being released violates the First Amendment, per the Daily Mail, which first reported on the news.