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Economy in Brief

U.S. Durable Goods Orders Strength Is Broad-based
by Tom Moeller  June 25, 2013

Improvement in new orders is broadening within the factory sector. New orders for durable goods jumped 3.6% (7.6% y/y) during May following a like increase in April, initially reported as 3.3%. A 2.5% rise in orders for last month had been expected. As in April, higher orders in the transportation sector led the increase with a 10.2% gain (19.2% y/y). It reflected a 39.2% jump (60.5% y/y) in aircraft & parts bookings. Nondefense aircraft orders increased by one-half (85.9% y/y) while defense aircraft orders gained 3.7% (0.5% y/y. Orders for motor vehicles and parts fell 1.2% (+7.3% y/y).

Orders excluding the transportation sector rose 0.7% (2.8% y/y), which followed a 1.7% April jump. The broad-based gain reflected a 2.7% increase (-5.2% y/y) in orders for computers & electronic products. Communications equipment orders jumped 12.6% (19.0% y/y) and computers & related products gained 1.0% (-15.1% y/y). Orders for electrical equipment strengthened by 1.4% (-2.3% y/y) while machinery orders rose 1.2% (6.5% y/y). Primary metal orders gained 0.9% (6.0% y/y) but orders for fabricated metals were off 0.9% (+2.7% y/y). Nondefense capital goods orders surged for a second month. The 9.3% gain (15.9% y/y) added to its 3.5% April rise. Orders excluding aircraft & parts, a measure of "core" business investment, gained 1.1% (3.2% y/y), the third consecutive month of a similar increase.

Shipments of durable goods improved 1.2% last month (2.4% y/y) to the series' record high. Transportation sector shipments jumped 3.6% last month and rose 7.5% y/y. Outside of the transportation sector, shipments ticked up 0.2% (0.3% y/y). Nondefense capital goods shipments recovered 6.0% (4.5% y/y) to a record high; excluding aircraft, they gained 1.7% (1.6% y/y).

Unfilled orders for durable goods rose 0.8% (3.1% y/y) in May. Outside of the transportation sector, backlogs gained 0.8% (-0.8% y/y). Inventories of durable goods ticked up 0.1% (3.1% y/y) last month. Excluding transportation, inventories also nudged up 0.1% (0.2% y/y).

The durable goods figures are available in Haver's USECON database. The Action Economics consensus forecast figure is in the AS1REPNA database. 

 

Durable Goods NAICS Classification May Apr Mar Y/Y 2012 2011 2010
New Orders 3.6 3.6 -5.9 7.6 4.1 11.0 23.2
  Transportation 10.2 8.3 -15.0 19.2 8.9 14.9 49.5
Total Excluding Transportation 0.7 1.7 -1.6 2.8 2.1 9.5 15.2
  Nondefense Capital Goods 9.3 3.5 -8.9 15.9 3.7 15.3 27.5
    Excluding Aircraft 1.1 1.2 1.1 3.2 2.1 11.6 12.9
Shipments 1.2 -0.6 0.9 2.4 6.4 9.4 11.0
Inventories 0.1 0.3 -0.1 3.1 4.5 10.8 9.4
Unfilled Orders 0.8 0.3 -0.6 3.1 3.7 10.0 5.2
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