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Economy in Brief

Rise in U.S. Durable Goods Orders All Air(craft)
by Tom Moeller December 23, 2005

Orders for nondefense aircraft more than doubled m/m last month (158.6% y/y) and combined with a 51.6% surge in October to lift durable goods orders 4.4% versus Consensus expectations for a 1.0% November rise.

Less the volatile transportation sector, durable goods orders fell 0.6% for the third consecutive monthly decline.

Declines in orders last month were widespread across industries. Machinery orders, which had been strong, fell 1.6% (+12.7% y/y). Orders for communications equipment also fell 4.4% (+8.6% y/y) as did orders for motor vehicles & parts which fell 5.7% (-2.1% y/y). Finally, fabricated metals orders fell 2.4% (+1.4%), down for the second consecutive month.

To the upside, orders for computers & related products rose 5.3% (11.6% y/y) and primary metals orders increased 1.4% (11.4% y/y).

Orders for nondefense capital goods rose 19.6% due to the surge in aircraft orders which continued to benefit from the end of the Boeing strike in September. Less aircraft, nondefense capital goods orders fell 2.0% and have been erratically moving sideways since the Spring.

Shipments of durable goods fell 0.2% (6.3% y/y) in November following a 1.2% October increase. Less the transportation sector, shipments fell slightly (6.7% y/y) after a 1.0% October jump.

Order backlogs jumped 3.1% (13.9% y/y), again reflecting the rebound in aircraft. Less transportation backlogs rose a more moderate 0.7% (9.6% y/y) but the ratio of backlogs to shipments outside of transportation rose to its highest level since early 2002.

Durable inventories rose 0.5% (4.1% y/y) after a like gain October. The I/S ratio for durable goods increased modestly m/m but remained below the highs of earlier this year.

NAICS Classification Nov Oct Y/Y 2004 2003 2002
Durable Goods Orders 4.4% 3.0% 12.1% 9.5% 4.1% -3.4%
    Excluding Transportation -0.6% -0.2% 7.1% 11.7% 3.1% -6.2%
Nondefense Capital Goods 19.6% 6.7% 31.4% 11.0% 4.2% -9.8%
 Excluding Aircraft -2.0% 1.2% 7.5% 9.5% 4.8% -10.5%
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