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Economy in Brief

U.S. Durable Goods Orders Suffer a Setback
by Tom Moeller  June 25, 2014

New orders for durable goods declined 1.0% (+2.7% y/y) during May and reversed an unrevised 0.8% April rise. The decline contrasted with expectations for no change in the Action Economics Forecast Survey. Fewer new orders for transportation equipment led the decline with a 3.0% shortfall (-0.9% y/y), the first down-month in four. It reflected a 4.0% drop (-21.6% y/y) in commercial aircraft & parts orders. Defense aircraft bookings gained 5.9% (19.9% y/y) while motor vehicle & parts orders increased 2.1% (4.7% y/y).

Outside of the transportation sector, new orders slipped 0.1% (+4.4% y/y) last month after a 0.4% rise. New orders for electrical equipment & appliances were off 3.1% (-2.4% y/y) after a 0.8% rise. Computers & electronic products orders fell 1.7% (-1.5% y/y), about as they did in April. Machinery orders were off 0.3% (+8.6 y/y) and added to a 2.4% decline. To the upside, primary metal orders jumped 1.9% (5.2% y/y) and fabricated metals orders moved 0.3% higher (2.4% y/y). Nondefense capital goods orders declined 0.5% (1.8% y/y) but orders excluding aircraft improved 0.7% (4.0% y/y), making up most of the prior month's decline.

Shipments of durable goods gained 0.3% (3.7% y/y) after April's stability. Shipments excluding the transportation sector increased 0.3% (5.0% y/y) for the second consecutive month. Inventories of durable goods jumped 1.0% (5.5% y/y), the strongest gain since December. Inventories outside the transportation sector gained 0.9% (3.4% y/y), also the strongest rise this year. Unfilled orders improved 0.6% (7.9% y/y) and added to a 0.9% gain. Order backlogs outside of the transportation sector rose 0.5% (5.8% y/y), the third straight month of firm increase.

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 May Apr Mar Y/Y 2013 2012 2011
New Orders (SA, %) -1.0 0.8 3.7 2.7 5.2 4.1 11.0
  Transportation -3.0 1.7 5.2 -0.9 7.9 8.9 14.9
Total Excluding Transportation -0.1 0.4 3.0 4.4 4.0 2.1 9.5
  Nondefense Capital Goods -0.5 -0.6 9.7 -1.8 8.7 3.7 15.3
    Excluding Aircraft 0.7 -1.1 4.7 4.0 5.0 2.1 11.6
Shipments 0.3 0.0 1.4 3.7 3.7 6.4 9.4
Inventories 1.0 0.3 0.2 5.5 3.8 4.5 10.8
Unfilled Orders 0.6 0.9 0.8 7.9 7.0 3.6 10.0
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