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Economy in Brief
Japan Shows Very Moderate Growth As Trade War Clouds Gather
Japan’s sector indexes showed a solid gain in February...
U.S. Consumer Confidence Unexpectedly Rose in April
The Conference Board Consumer Confidence Index rose to 128.7 in April from 127.0 (initially reported as 127.7) in March...
U.S. New Home Sales and Prices Strengthen
Sales of new single-family homes during March increased 4.0% (8.8% y/y) to 694,000 (SAAR)...
U.S. FHFA House Price Index Continues to Strengthen
The FHFA index of U.S. house prices rose 0.6% during February...
U.S. Energy Prices Rise Further
Retail gasoline prices increased to $2.80 per gallon last week (14.3% y/y)...
by Tom Moeller May 24, 2006
New orders for durable goods fell 4.8% last month, giving back much of the upwardly revised 6.6% March increase. Nevertheless, durable orders in April remained up 11.3% versus last year and for the first four months of this year orders also were 11.2% ahead of 2005. Consensus expectations had been for a 0.5% April decline.
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 32.2% (+99.5% y/y) drop in orders for nondefense aircraft & parts led last month's decline in total orders. In addition, new orders for motor vehicles & parts dropped 1.6% (+2.1% y/y).
Less the transportation sector altogether, durable goods orders fell 1.1% and gave back a piece of the upwardly revised March gain.
Orders for computers & electronic products gave back all of an upwardly revised March gain and fell 10.4% (+10.0% y/y). Machinery orders, however, fell just 0.2% (+12.1% y/y) after a 5.7% April increase that was little revised. Electrical equipment orders rose for the first month in three, up 5.2% (15.7% y/y), while orders for primary metals jumped 3.2% (16.6% y/y).
Orders for nondefense capital goods gave back half of the prior month's surge with a 6.0% drop while orders less aircraft fell 1.7% but remained 9.4% ahead of the year ago level. 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.
Shipments of durable goods fell 0.9% (+6.0% y/y) following two months of 0.3% gain. Less the transportation sector shipments fell 0.1% (+8.1% y/y) for the second consecutive month. 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.
Order backlogs jumped 1.5% (23.0% y/y), again reflecting a surge in nondefense aircraft & parts (75.1% y/y). Less transportation backlogs were strong again and posted a 1.1% (13.7% y/y) rise. The ratio of backlogs to shipments outside of transportation jumped to the highest level in two years.
Durable inventories increased 0.8% (2.9% y/y). Less transportation inventories also rose 0.8% (3.3% y/y) and the inventory to sales ratio outside of the transportation sector rose for the second month.
NAICS Classification | April | Mar | Y/Y | 2005 | 2004 | 2003 |
---|---|---|---|---|---|---|
Durable Goods Orders | -4.8% | 6.6% | 11.3% | 9.0% | 6.4% | -0.6% |
Excluding Transportation | -1.1% | 3.5% | 10.3% | 9.4% | 7.6% | -1.7% |
Nondefense Capital Goods | -6.0% | 11.9% | 18.6% | 21.4% | 5.6% | -3.4% |
Excluding Aircraft | -1.7% | 3.6% | 9.4% | 12.3% | 2.8% | -2.0% |