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Economy in Brief

U.S. Durable Goods Orders Boosted by Defense Aircraft
by Carol Stone  November 26, 2014

New orders for durable goods rose 0.4% during October (+5.5% y/y) following a 0.9% fall in September, revised from -1.3%. The October increase countered expectations for a 0.6% decline in the Action Economics Forecast Survey. The defense aircraft sector was responsible for much of the gain, as those orders rose 45.3% (+26.5% y/y).

Overall transportation sector orders were up 3.3% (3.6% y/y); total durable goods orders excluding transportation were down 0.9% (+6.4% y/y) after a 0.2% rise in September. Among transportation equipment industries other than defense aircraft, motor vehicles and parts showed a 0.3% gain (+2.9% y/y), reversing a 0.3% September decline. Nondefense aircraft orders edged lower 0.1% (-9.4% y/y), following their 16% drop in September.

Orders in other sectors were mostly down last month. Primary metals orders fell 2.4% (8.9% y/y), almost exactly reversing their September 2.5% rise (+5.1% y/y). Fabricated metal products eased 0.2% (+8.8% y/y) in October following a 1.0% gain. Electrical equipment orders were down 3.1% (+3.1% y/y) after their 3.1% September rise. And computer orders fell 3.4% (7.1% y/y) after a 1.9% decline. In contrast, communications equipment orders rebounded 8.9% following their September drop of 17.2%; the October amount is still 7.3% below October 2013.

Durable goods shipments increased 0.1% (5.6% y/y) after a slightly revised 0.3% rise in September. Excluding transportation equipment, shipments dipped 0.1% (+6.6% y/y) after a 0.3% increase. Total order backlogs rose 0.4% (+12.3% y/y) in October, the same as in the month before. Excluding the transportation sector, backlogs were also up 0.4% (+6.9% y/y) after 0.7% in September. Durable goods inventories rose 0.5% (+6.0% y/y), the same as a slightly revised September increase. Excluding the transportation sector, inventories were up 0.4% (4.4% y/y) for a third consecutive month.

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 Oct Sep Aug Y/Y 2013 2012 2011
New Orders (SA, %) 0.4 -0.9 -18.3 5.5 5.2 4.1 11.0
  Transportation 3.4 -3.3 -42.4 3.6 7.9 8.9 14.9
Total Excluding Transportation -0.9 0.2 0.7 6.4 4.0 2.1 9.5
  Nondefense Capital Goods -0.1 -5.1 -36.4 5.1 8.7 3.7 15.3
    Excluding Aircraft -1.3 -1.3 0.4 8.2 5.0 2.1 11.6
Shipments 0.1 0.3 -1.7 5.6 3.7 6.4 9.4
Inventories 0.5 0.5 0.4 6.0 3.8 4.5 10.8
Unfilled Orders 0.4 0.4 0.6 12.3 7.0 3.6 10.0
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