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Economy in Brief
German PPI Accelerates
The German year-on-year PPI has generally been decelerating since early 2017...
U.S. Leading Economic Indicators Signal Continued Expansion
The Conference Board's Composite Index of Leading Economic Indicators increased 0.3% during March...
Philadelphia Fed Factory Conditions Improve; Prices Jump
The Philadelphia Fed reported that its General Factory Sector Business Conditions Index rose to 23.2 during April...
U.S. Initial Claims for Unemployment Insurance Are Little Changed
Initial unemployment insurance claims slipped to 232,000 (-6.1% y/y) during the week ended April 14...
U.K. Retail Sales Fall
U.K. GDP is expected to cool its jets when the first quarter GDP number is released...
by Tom Moeller July 27, 2006
New orders for durable goods surged 3.1% in June after an upwardly revised 0.3% increase during the prior month. Consensus expectations had been for a somewhat lesser 2.0% jump.
An 8.8% rise in orders for nondefense aircraft & parts recovered not quite half of the 19.2% drop during May. Orders for defense aircraft jumped 12.9% (25.4% y/y).
Less the transportation sector altogether durable goods orders rose a firm 1.0%.
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.
Orders for nondefense capital goods recovered nearly all of the prior month's decline with a 1.3% gain. Less aircraft, orders rose a more moderate 0.4% during June but the prior month's increase was upwardly revised to 1.3%. 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.
Higher orders for computers & electronic products led last month's strength with a 3.4% (0.8% y/y) spurt though computer orders alone rose just 1.5% (-2.3% y/y) after a downwardly revised 3.0% slip during May. Machinery orders slipped 0.3% (+10.5% y/y) after an upwardly revised 4.3% May increase. Orders for electrical equipment & appliances fell 1.0% (+15.0% y/y) but the prior month was very much upwardly revised to show a 2.7% increase.
Shipments of durable goods ticked up 0.1% (8.4% y/y) after an upwardly revised 3.0% May jump. Shipments less the transportation sector rose 0.4% (9.9% y/y) but the May jump was revised up to 2.1%. 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 gained 1.7% (19.4% y/y) again reflecting the strength in nondefense aircraft & parts (53.7% y/y). Unfilled orders less transportation gained another 1.3% (14.1% y/y).
Durable inventories rose 0.6% (4.9% y/y) after an upwardly revised 0.7% May rise. Less transportation inventories also rose 0.6% (5.4% y/y). The inventory to sales ratio outside of the transportation sector rose slightly.
NAICS Classification | June | May | Y/Y | 2005 | 2004 | 2003 |
---|---|---|---|---|---|---|
Durable Goods Orders | 3.1% | 0.3% | 5.8% | 9.0% | 6.4% | -0.6% |
Excluding Transportation | 1.0% | 1.5% | 9.1% | 9.4% | 7.6% | -1.7% |
Nondefense Capital Goods | 1.3% | -1.9% | 3.5% | 21.4% | 5.6% | -3.4% |
Excluding Aircraft | 0.4% | 1.3% | 7.7% | 12.3% | 2.8% | -2.0% |