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Economy in Brief

U.S. Durable Goods Orders Lower Due To Aircraft
by Tom Moeller  January 27, 2011

There's hardly a more volatile component of the durable goods orders report than aircraft & parts. Last month's orders halved, pulling overall transportation orders down 12.8%. The declined owed to an evaporation of orders for commercial aircraft. Outside of this volatility in transportation, durable goods orders inched up 0.5% after a strong 4.5% November rise which was revised up sharply from 2.4%. For all of last year total durable goods orders rose 13.5%.

During last month, primary metals orders fell back 4.7% (+18.9% y/y) after their November surge. Computer orders also fell 1.2% (+10.4% y/y) and electrical equipment orders slipped 0.1% (+21.7% y/y) following an 8.6% November surge. Mitigating these declines was a 10.6% jump (23.5% y/y) in machinery orders.

Shipments of durable goods were more stable last month and increased 1.4% (4.1%) led by a 6.7% jump (13.7% y/y) in machinery. For the year shipments rose 7.2% following sharp declines both in 2008 and 2009. Not only have higher orders & shipments been powering activity in the factory sector but there's been a turn toward inventory accumulation since February. Inventories accumulated another 0.7% (9.0% y/y) in December following a 0.9% November increase. For all of last year inventories rose 9.0% after a 12.8% decline in 2009. Finishing the durables report was a modest 3.7% rise in unfilled orders last year after an 11.1% 2009 decline.

The durable goods figures are available in Haver's USECON database.

NAICS Classification (%) Dec Nov Oct Y/Y 2010 2009 2008
Durable Goods Orders -2.5 -0.1 -3.1 6.9 13.5 -20.7 -9.0
  Excluding Transportation 0.5 4.5 -2.0 11.5 13.6 -18.4 -2.5
Nondefense Capital Goods -6.3 -8.1 -3.8 10.0 21.6 -26.8 -12.6
  Excluding Aircraft 1.4 3.1 -3.2 15.5 16.6 -19.8 -4.2
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