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Economy in Brief

U.S. Durable Goods Orders Retreat Further
by Tom Moeller  October 28, 2014

New orders for durable goods declined 1.3% during September (+3.3% y/y) following a little-revised 18.3% August slump. The decline disappointed expectations for a 0.7% rise in the Action Economics Forecast Survey. It was exacerbated by a 16.1% drop (-19.2% y/y) in orders for nondefense aircraft & parts following its 74.0% decline in August. Overall transportation sector orders fell 3.7% (-4.9% y/y), without which durable orders slipped 0.2% (+7.3% y/y) after a 0.7% rise.

Orders in other sectors were mixed last month. Primary metals orders gained 2.2% (8.9% y/y) after a 0.1% rise. Electrical equipment orders improved 1.8% (10.1% y/y) following a 2.8% increase. To the downside, machinery orders fell 2.8% (+8.2% y/y) after a 1.1% gain. Computers & electronic products bookings declined 2.5% (+5.3% y/y) after a 1.7% increase. This falloff reflected a 5.3% drop (-17.2% y/y) in orders for computers & related products, the fourth consecutive monthly shortfall. Communication equipment bookings plummeted 16.6% (-16.7% y/y) after a 1.3% gain.

Shipments of durable goods edged 0.1% higher (5.7% y/y) following a 1.8% decline. Shipments excluding transportation were roughly unchanged (6.4% y/y) for the second straight month. Order backlogs improved 0.3% (12.2% y/y) following a 0.6% increase. Excluding transportation unfilled orders rose unfilled orders rose 0.7% (6.8% y/y). Inventory building remained steady with a fourth straight 0.4% increase (5.8% y/y). Excluding the transportation sector, inventories rose 0.3% (4.0% 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 Sep Aug Jul Y/Y 2013 2012 2011
New Orders (SA, %) -1.3 -18.3 22.5 3.3 5.2 4.1 11.0
  Transportation -3.7 -42.4 73.3 -4.9 7.9 8.9 14.9
Total Excluding Transportation -0.2 0.7 -0.6 7.3 4.0 2.1 9.5
  Nondefense Capital Goods -5.4 -36.5 60.9 1.4 8.7 3.7 15.3
    Excluding Aircraft -1.7 0.3 -0.1 7.6 5.0 2.1 11.6
Shipments 0.1 -1.8 3.7 5.7 3.7 6.4 9.4
Inventories 0.4 0.4 0.4 5.8 3.8 4.5 10.8
Unfilled Orders 0.3 0.6 5.3 12.2 7.0 3.6 10.0
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