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Economy in Brief
U.S. Housing Affordability Declines Further in June
The NAR Fixed Rate Mortgage Housing Affordability Index fell 3.6% in June...
EMU Output Makes Solid Gain in June
The European Monetary Union posted a 0.7% increase for industrial output in June...
U.S. Producer Prices Fall During July; Core Increase Weakens
The Producer Price Index for Final Demand fell 0.5% during July...
U.S. Unemployment Claims Continue on an Uptrend
Initial claims for unemployment insurance filed in the week ended August 6 rose 14,000 to 262,000...
RICS Survey Points to More U.K. Housing Sector Weakness
The survey of housing market conditions in the U.K. continues to show strength in prices versus weakness...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Tom Moeller January 26, 2007
The 3.1% surge in new orders for durable goods about matched Consensus expectations and followed an upwardly revised 2.2% increase in November. For the year durable goods orders rose 7.1%, down just moderately from the 9.0% gain during 2005 but much of the strength reflected gains at the end of 2005 and early 2006.
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..
Another strong 24.8% (-8.6% y/y) gain in total aircraft & parts orders boosted durable goods bookings last month after a 13.2% rise during November. Orders for motor vehicles & parts even turned in a sharp 6.8% (0.0% y/y) gain. Yet less transportation altogether, orders still rose 2.3% and made up for most of the declines during the prior two months.
Orders for nondefense capital goods less aircraft rose 2.4% reflecting a 5.0% (6.1% y/y) surge in machinery orders. 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.
Orders for computers & electronic products rose 1.0% (11.4% y/y) after an 8.0% November spike. Primary metals orders also jumped 4.5% (9.1% y/y) making up nearly all of the declines during the prior tree months.
Shipments of durable goods gained 0.8% (0.5% y/y) after flat-to-down movement over the prior several months. Less the transportation sector, however, shipments fell 0.1% (+2.1% y/y) for the fourth consecutive monthly decline. 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 again rose moderately, by 0.4% (8.4% y/y) after a 0.3% November rise. Less the transportation sector, however, inventories doubled the modest 0.3% November gain with a 0.6% (9.3% y/y) increase. The inventory to shipments ratio outside of transportation, as a result, rose further to the highest level since early 2004.
NAICS Classification | December | November | Y/Y | 2006 | 2005 | 2004 |
---|---|---|---|---|---|---|
Durable Goods Orders | 3.1% | 2.2% | 2.6% | 7.1% | 9.0% | 6.4% |
Excluding Transportation | 2.3% | -1.0% | 5.1% | 8.1% | 9.4% | 7.6% |
Nondefense Capital Goods | 9.0% | -0.3% | 0.9% | 9.7% | 21.4% | 5.6% |
Excluding Aircraft | 2.4% | -1.0% | 6.7% | 9.2% | 12.3% | 2.8% |