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Economy in Brief

U.S. Durable Goods Orders Recover M/M as Bookings for Capital Goods Jump
by Tom Moeller  July 25, 2014

New orders for durable goods improved 0.7% (-1.6% y/y) during June and reversed most of an unrevised 1.0% May decline. The increase roughly matched expectations in the Action Economics Forecast Survey. A 1.8% rebound (-10.4% y/y) in nondefense capital goods orders paced last month's overall orders increase. The May figure was revised, however, to show a 2.1% decline rather than the 0.5% drop reported initially. Nondefense capital goods orders excluding aircraft improved 1.4% (1.9% y/y). The increase followed declines of roughly 1.2% in the prior two months. Nondefense aircraft bookings gained 8.2% (-41.7% y/y) after two months of significant shortfall while defense aircraft orders jumped 15.3% (25.3% y/y), roughly the same as during the prior two months. Orders for motor vehicles & parts fell 2.1% (+1.6% y/y) following a 1.6% rise.

New orders for machinery jumped 2.4% (7.9% y/y) and mostly recovered two months of sharp decline. Primary metals orders increased 0.9% (8.6% y/y) after a 2.6% rise. Orders for computers & electronic products gained 0.8% (0.1% y/y). The rise followed two months of roughly 1.9% decline. Orders for computers & related products were off 13.9% (-4.1% y/y) and reversed most of the prior two months' increases. Communications equipment bookings slipped 0.6% (-21.9% y/y) after two months of significant shortfall. Electrical equipment bookings slipped 0.2% (-2.7% y/y). That added to a 2.9% drop and fabricated metal orders also moved 0.2% lower (+2.2% y/y) after a 0.9% rise.

Shipments of durable goods edged 0.1% higher (3.7% y/y) but were roughly unchanged during the last three months. Shipments excluding the transportation sector also were nearly unchanged for three months. Unfilled orders for durable goods gained 0.8 (6.6% y/y), about as they did during the prior three months. Backlogs excluding transportation rose 0.9% (5.9% y/y), the fourth consecutive month of firm increase. Inventories gained 0.4% (5.8% y/y) after a 1.0% jump. Much of the increase reflected transportation product inventories which rose 0.7% (10.7% y/y).

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 Jun May Apr Y/Y 2013 2012 2011
New Orders (SA, %) 0.7 -1.0 0.9 -1.6 5.2 4.1 11.0
  Transportation 0.6 -2.8 1.8 -13.4 7.9 8.9 14.9
Total Excluding Transportation 0.8 -0.1 0.4 4.9 4.0 2.1 9.5
  Nondefense Capital Goods 1.8 -2.1 -0.6 -10.4 8.7 3.7 15.3
    Excluding Aircraft 1.4 -1.2 -1.1 1.9 5.0 2.1 11.6
Shipments 0.1 -0.1 0.1 3.7 3.7 6.4 9.4
Inventories 0.4 1.0 0.2 5.8 3.8 4.5 10.8
Unfilled Orders 0.8 0.7 0.9 6.6 7.0 3.6 10.0
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