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Economy in Brief

U.S. October Durable Goods Orders Slip on Swing in Aircraft Orders
by Sandy Batten  November 27, 2013

U.S. durable goods orders fell 2.0% in October, in line with market expectations, after an upwardly revised 4.1% monthly jump in September. A wide swing in transportation orders (mostly aircraft) was behind both the September increase and October decline in the headline figure. Transportation orders surged 13% in September but fell 5.9% in September. (Aircraft orders ballooned 46.4% in September and then plummeted 16.7% in October.) Excluding the volatile transportation sector, orders edged down 0.1% in October after a 0.2% rise in the previous month.

Gains were seen in primary metals, computers & electronics, and electrical equipment, while fabricated metals, machinery, and "other" posted monthly declines. Unfilled orders rose 0.3% in November, their seventh consecutive monthly increase. And inventories gained 0.3%, their sixth rise in the past seven months.

Businesses continue to be cautious in committing to longer-term investment projects as nondefense capital goods orders excluding aircraft (a leading indicator of business spending on equipment in the national accounts) fell 1.2% in October, their third monthly decline in the past four months. These orders are now at their lowest level since February. Shipments of nondefense capital goods ex aircraft (key source data for equipment spending in the national accounts) slipped 0.2% in October but are up 1.0% over the past three months, auguring a modest rebound in business equipment purchases in GDP in Q4 after a surprise decline in Q3, only the second decline since the last recession.

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 Oct Sep Aug Y/Y 2012 2011 2010
New Orders -2.0 4.1 .5 5.2 4.1 11.0 23.2
  Transportation -5.9 13.0 1.8 7.4 8.9 14.9 49.5
Total Excluding Transportation -0.1 0.2 -0.1 4.3 2.1 9.5 15.2
  Nondefense Capital Goods -3.9 6.8 -0.1 2.0 3.7 15.3 27.5
    Excluding Aircraft -1.2 -1.4 1.0 3.6 2.1 11.6 12.9
Shipments 0.2 0.5 1.0 4.8 6.4 9.4 11.0
Inventories 0.3 0.8 0.1 2.6 4.5 10.8 9.4
Unfilled Orders 0.3 0.9 0.1 6.4 3.7 10.0 5.2
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