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Economy in Brief

U.S. Durable Goods Orders Lose Forward Momentum
by Tom Moeller  January 28, 2014

The durable goods manufacturing sector had a good year in 2013. New orders increased 5.1% for the full year following a 4.1% gain in 2012. These increases were, however, slower than the double-digit gains of the prior two years. Earlier strength in the durable manufacturing sector eased at yearend. Orders for durable goods declined 4.3% (+0.1% y/y) last month following a 2.6% November jump, revised from the initial report of a 3.5% increase. A 1.7% rise had been expected in the Action Economics Forecast Survey. A 17.5% drop (+26.3% y/y) in orders for nondefense aircraft & parts led the outsized decline in bookings last month. In addition, defense aircraft orders were off 12.9% (-51.2% y/y. Weakness in the transportation sector also reflected a 5.8% drop (+7.4% y/y) in motor vehicles & parts orders.

Outside of the transportation sector new orders fell 1.6% (+2.9% y/y) following three months of modest gain. Orders for electrical equipment, appliances & components increased 2.8% (3.7% y/y) and orders for machinery gained 0.8% (14.8% y/y). These increases were offset, however, by a 7.8% slide (-4.3% y/y) in orders for computers & electronic products. Earlier strength in business investment also eased last month. Nondefense capital goods orders fell 5.0% (+11.3% y/y) as orders excluding aircraft declined 1.3% (+6.2% y/y).

Shipments of durable goods declined 1.9% (+2.8% y/y) in December following four consecutive months of increase. Shipments excluding the transportation sector slipped 0.3% (+2.4% y/y), also after four months of gain. Unfilled orders gained 0.4% (7.0% y/y) but order backlogs outside of the transportation sector slipped 0.2% (+6.4% y/y). Inventories of durable goods jumped 0.8% (3.6% y/y), the largest increase since September. Inventories outside the transportation sector rose 0.7% (1.2% y/y).

The Productivity Paradox: Is Technology Failing or Fueling Growth? from the Federal Reserve Bank of Atlanta is available here.

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 Dec Nov Oct Y/Y 2013 2012 2011
New Orders -4.3 2.6 -0.7 0.1 5.1 4.1 11.0
  Transportation -9.5 7.9 -3.5 -5.4 7.9 8.9 14.9
Total Excluding Transportation -1.6 0.1 0.7 2.9 3.9 2.1 9.5
  Nondefense Capital Goods -5.0 7.8 -0.8 11.3 8.7 3.7 15.3
    Excluding Aircraft -1.3 2.6 -0.6 6.2 5.1 2.1 11.6
Shipments -1.9 1.3 0.6 2.8 3.7 6.4 9.4
Inventories 0.8 0.3 0.3 3.6 3.6 4.5 10.8
Unfilled Orders 0.4 0.9 0.6 7.0 7.0 3.7 10.0
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