·
New orders for durable goods rose 1.9% last month, a gain after the
offsetting volatility of the prior two months when orders fell 8.2% in
October after an 8.7% September spike. Consensus expectations had been
for a 1.5% rise n total orders during November.
· During the last ten years there has been a 69% correlation between the y/y change in durable goods orders and the change in output of durable goods..
· A 14.4% rise in total aircraft & parts orders last month, however, still added volatility. In addition, orders for motor vehicles & parts rose 0.2% (-3.9% y/y). Less transportation altogether, slipped 1.1%.
· And broad based order declines in
other industries continued to raise questions about the health of the
factory sector. Orders for nondefense capital goods less aircraft fell
1.4% reflecting a 1.5% (+5.2% y/y) slide in electrical equipment orders
and an 8.9% (+3.8% y/y) drop in machinery. During the last ten
years there has been an 86% correlation between the y/y change in
capital goods orders less aircraft and the y/y change in business fixed
investment in equipment & software from the GDP accounts.
· Primary metals orders fell 1.9% (+4.1% y/y), down for the third month in the last four. To the upside were orders for computer s & electronic products which rose 7.5% (10.4% y/y).
· Shipments of durable goods increased another slight 0.1% (2.7% y/y) after the downwardly revised 0.3% October uptick. Less the transportation sector shipments fell 0.1% (+4.6% y/y) for the second decline in the last three months. During the last ten years there has been an 82% correlation between the y/y change in durable goods shipments and the change in industrial production of durable goods.
· Durable inventories rose just 0.3% (7.8% y/y), the weakest monthly increase since a decline in February. Less the transportation sector inventories also increased a modest 0.2% (8.4% y/y) and the inventory to shipments ratio outside of transportation rose to the highest level since July of last year.