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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 July 26, 2007
The 1.4% rise in new orders for durable goods during June missed Consensus expectations for a 1.6% increase. Though the shortfall was only slight, the gain failed to make up for a 2.3% decline during May and other details within the report were soft.
During the last ten years there has been a 67% correlation between the y/y change in durable goods orders and the change in production of durable goods.
Orders for nondefense capital goods did jump 4.6% last month, but again the increase failed to make up the prior months 6.8% decline. And excluding aircraft & parts orders fell 0.7%, the fourth decline this year and it pulled the y/y change to a negative 2.4%. During the last ten years there has been an 84% 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 fell 4.6% (-3.2% y/y) after a 5.0% gain during May. Orders for just computers & related products fell 3.9% (-2.2% y/y). Primary metals orders dropped 3.6% (-3.3% y/y) after a 4.7% slide during May. And the 1.5% (2.8% y/y) increase in electrical equipment orders during June only recouped about half of the prior months 3.8% slip.
Shipments of durable goods fell 1.1% (-0.8% y/y) after a modest 0.6% increase during May. Less the transportation sector shipments fell 1.1% (-0.2% y/y). 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. The June decline reflected a 4.0% (-1.3% y/y) drop in shipments of computers & electronic products but a firm 0.7% (15.9% y/y) rise in shipments of machinery.
NAICS Classification | June | May | Y/Y | 2006 | 2005 | 2004 |
---|---|---|---|---|---|---|
Durable Goods Orders | 1.4% | -2.3% | -0.6% | 6.3% | 9.9% | 5.3% |
Excluding Transportation | -0.5% | -0.2% | -1.7% | 7.6% | 8.8% | 7.9% |
Nondefense Capital Goods | 4.6% | -6.8% | 6.5% | 10.6% | 17.1% | 5.7% |
Excluding Aircraft | -0.7% | -1.5% | -2.4% | 8.5% | 11.1% | 3.2% |