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Economy in Brief

U.S. Durable Goods Orders Retain Upward Momentum
by Tom Moeller  May 27, 2014

Manufacturing sector activity continues to register surprising improvement. New orders for durable goods increased 0.8% during April (7.1% y/y) following a 3.6% March rise, initially reported as 2.6%. The increase beat expectations for a 0.7% decline in the Action Economics Forecast Survey. New orders for transportation equipment continued to lead the monthly increase with a 2.3% advance (12.3% y/y) which added to even stronger gains in the prior two months. It reflected a 13.1% jump (5.6% y/y) in defense aircraft & parts bookings. Commercial aircraft & parts orders declined 4.1% (22.5% y/y) after two strong monthly increases while motor vehicle & parts bookings were off 1.0% (+0.8% y/y).

Outside of the transportation sector new orders ticked 0.1% higher (4.8% y/y) last month following a 2.9% jump. New orders for electrical equipment and appliances gained 1.1% (4.1% y/y). The rise was offset, however, by a 2.9% drop (+7.2% y/y) in machinery bookings and a 1.1% shortfall (+2.9% y/y) in orders for computers & electronic products. Fabricated metals orders jumped 3.4% (-0.2% y/y) but primary metals orders declined 0.4% (+5.5% y/y). Nondefense capital goods orders declined 1.0% (+6.7% y/y) following a 9.7% surge. Orders excluding aircraft were off 1.2% (+3.9% y/y) after a 4.7% jump.

Shipments of durable goods slipped 0.2% (+4.6% y/y) on the heels of two months of strong increase. Shipments excluding the transportation sector ticked 0.1% higher (5.1% y/y) following a 1.4% advance. Unfilled orders improved 1.0% (8.2% y/y) after a 0.8% gain, while order backlogs outside of the transportation sector rose 0.7% (6.0% y/y) for the second consecutive month. Inventories of durable goods ticked 0.1% higher (4.3% y/y) after March's 0.2% rise. Inventories outside the transportation sector were unchanged (2.2% y/y) following a 0.1% uptick.

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 Apr Mar Feb Y/Y 2013 2012 2011
New Orders (SA, %) 0.8 3.6 2.6 7.1 5.2 4.1 11.0
  Transportation 2.3 5.0 6.9 12.3 7.9 8.9 14.9
Total Excluding Transportation 0.1 2.9 0.8 4.8 4.0 2.1 9.5
  Nondefense Capital Goods -1.0 9.7 -1.8 6.7 8.7 3.7 15.3
    Excluding Aircraft -1.2 4.7 0.1 3.9 5.0 2.1 11.6
Shipments -0.2 1.3 1.1 4.6 3.7 6.4 9.4
Inventories 0.1 0.2 0.8 4.3 3.8 4.5 10.8
Unfilled Orders 1.0 0.8 0.3 8.2 7.0 3.6 10.0
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