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Economy in Brief

U.S. Durable Goods Order Decline Reflects a Weaker Transportation Sector
by Tom Moeller  February 27, 2014

New orders for durable goods fell 1.0% during January (+4.6 y/y) following a 5.3% December drop, revised from a 4.3% decline. The latest decline matched expectations in the Action Economics Forecast Survey. A 5.6% drop (+13.6% y/y) in orders for transportation equipment weighed on last month's total. Nondefense aircraft & parts orders fell 20.2% (+56.7% y/y) after December's 22.3% shortfall. Motor vehicle & parts orders also softened, posting a 2.2% drop last month (+3.8% y/y) on the heels of a 6.6% decline.

Outside of the transportation sector, new orders showed mixed performance as a 1.1% gain (1.2% y/y) countered December's 1.9% decline. Fabricated metal orders led the increase with a 7.3% rise (-9.1 y/y). Orders for computers & electronic products followed with a 4.7% rise (1.7% y/y). Working to the downside, primary metal orders were off 2.3% (+7.0% y/y and electrical equipment, appliances & components orders declined 2.1% (+3.7% y/y). Machinery orders slipped 0.4% (+1.5% y/y). Nondefense capital goods orders fell 3.9% (+5.6% y/y) reflecting the weakened aircraft bookings. Excluding aircraft, however, orders improved 1.7% (-0.8% y/y) and reversed December's decline.

Shipments of durable goods were off 0.4% (+3.4% y/y) in January following December's 1.8% fall. Shipments excluding the transportation sector slipped 0.5% (+2.7% y/y), the first material decline in nine months. Unfilled orders ticked 0.1% higher (7.1% y/y) while order backlogs outside of the transportation sector gained 0.3% (5.7% y/y). Inventories of durable goods improved 0.3% (3.7% y/y) after December's 0.9% jump. Inventories outside the transportation sector were roughly unchanged (1.4% y/y).

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

Semiannual Monetary Policy Report to the Congress by Fed Chair Janet L. Yellen can be found here.

Durable Goods NAICS Classification Jan Dec Nov Y/Y 2013 2012 2011
New Orders (SA, %) -1.0 -5.3 2.7 4.6 5.1 4.1 11.0
  Transportation -5.6 -12.0 8.1 13.6 7.7 8.9 14.9
Total Excluding Transportation 1.1 -1.9 0.2 1.2 3.9 2.1 9.5
  Nondefense Capital Goods -3.9 -6.5 8.2 5.6 8.6 3.7 15.3
    Excluding Aircraft 1.7 -1.8 3.0 -0.8 5.1 2.1 11.6
Shipments -0.4 -1.8 1.4 3.4 3.7 6.4 9.4
Inventories 0.3 0.9 0.3 3.7 3.7 4.5 10.8
Unfilled Orders 0.1 0.2 0.9 7.1 6.8 3.7 10.0
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