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Economy in Brief

U.S. Durable Goods Orders Soar
by Tom Moeller June 24, 2005

New orders for durable goods soared 5.5% in May, lifted by aircraft & parts orders which more than doubled m/m. Consensus expectations had been for a 1.5% rise.

The 125% surge in orders for aircraft raised transportation equipment orders by 21.2%. A 0.2% (-1.6%) gain in motor vehicles & parts also contributed.

Less transportation durable orders fell 0.2% (+6.6% y/y) for the third slight decline in the last four months. Computer & electronic equipment orders fell 1.2% (+5.2% y/y), the second consecutive monthly decline, and machinery orders fell 1.9% (+8.7% y/y). Electrical equipment orders rose 0.3% (4.2% y/y) and "other" orders rose 1.8% (6.3% y/y).

Orders for non-defense capital goods rose 14.5% on the strength of the orders received by Boeing. Less aircraft capital goods orders fell 2.3% and shipments rose just 0.2% (12.2% y/y). During the last four months shipments have fallen 1.1%.

Durable inventories rose 0.3% (8.7% y/y) following no change in April. Less transportation inventories also rose 0.3% (9.8% y/y).

Unfilled orders jumped 1.9% (7.6% y/y) but outside of the transportation sector backlogs fell slightly (+7.7% y/y). The ratio of backlogs to shipments outside of transportation has been moving erratically sideways since early last year.

How Long Is Long Term Investment? from the Federal Reserve Bank of Kansas City is available here.

NAICS Classification May April Y/Y 2004 2003 2002
Durable Goods Orders 5.5% 1.4% 10.7% 10.8% 2.6% -1.7%
    Excluding Transportation -0.2% -0.7% 6.6% 13.1% 3.2% -4.2%
Nondefense Capital Goods 14.5% 4.0% 28.2% 13.7% 5.6% -7.2%
 Excluding Aircraft -2.3% 1.7% 8.9% 11.7% 6.6% -7.1%
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