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Economy in Brief

U.S. Durable Goods Orders Decline Sharply; Orders Excluding Transportation Slip
by Tom Moeller  August 26, 2013

New orders for durable goods slumped 7.3% last month (-0.3% y/y) following a downwardly revised 3.9% increase during June, earlier reported as a 4.2% advance. The decline compared to consensus expectations for a 3.7% drop. Fewer orders for transportation equipment led the decline with a 19.4% slump (-11.8% y/y). Aircraft orders dropped 44.3% (-32.0% y/y) held back by a 52.3% shortfall (-39.9% y/y) in nondefense bookings. Motor vehicle parts orders offset some of this decline with a 0.5% gain (5.4% y/y).

Outside of the transportation sector, orders growth has moderated. Orders less transportation slipped 0.6% (+5.9% y/y) following a 0.1% June uptick. Electrical equipment orders declined 4.3% (+4.3% y/y) after an unchanged in June while computers & electronic products fell 3.6% (-0.7% y/y) following a 0.8% June decline. Orders for computers & related products fell 19.9% (-22.7% y/y). Machinery orders were unchanged (+13.0% y/y) as were orders for primary metals (4.1% y/y). The 15.4% decline (-3.4% y/y) in nondefense capital goods orders reflected the drop in aircraft. A 3.3% shortfall (8.4% y/y) in orders elsewhere was the first drop in five months.

Shipments of durable goods slipped 0.3% (+2.1% y/y), the third shortfall in the last four months. Transportation shipments slipped 0.1% (+5.6% y/y). Shipments excluding transportation were off 0.4% (+0.7% y/y) led by a 3.2% drop (-9.2% y/y) in computers & electronic products. Shipments of nondefense capital goods fell 1.4% (+1.2% y/y), the third decline in the last four months, while excluding aircraft orders were off 1.5% (+0.8% y/y).

Inventories of durable goods rose 0.4% (2.5% y/y), the first meaningful increase since February. Excluding transportation inventories rose 0.2% but were unchanged y/y. Unfilled orders for durable goods gained 0.4% (4.3% y/y). Excluding transportation backlogs gained 0.9% (2.3% y/y) and have firmed following a decline during all of last year.

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 Jul Jun May Y/Y 2012 2011 2010
New Orders -7.3 3.9 5.5 -0.3 4.1 11.0 23.2
Transportation -19.4 11.7 15.1 -11.8 8.9 14.9 49.5
Total Excluding Transportation -0.6 0.1 1.3 5.9 2.1 9.5 15.2
Nondefense Capital Goods -15.4 7.1 12.8 -3.4 3.7 15.3 27.5
Excluding Aircraft -3.3 1.3 2.1 8.4 2.1 11.6 12.9
Shipments -0.3 -0.1 1.3 2.1 6.4 9.4 11.0
Inventories 0.4 0.2 -0.1 2.5 4.5 10.8 9.4
Unfilled Orders 0.4 2.1 1.2 4.3 3.7 10.0 5.2
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