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Economy in Brief

U.S. Durable Goods Orders Show Unexpected Decline
by Carol Stone  December 23, 2014

New orders for durable goods fell 0.7% in November (+0.3% y/y) after rising 0.3% in October, which was marginally revised from 0.4%. The November decline confounded expectations for a 3.0% gain in the Action Economics Forecast Survey. The defense aircraft sector, which had supported orders in October, decreased in the latest month, along with several other industries.

Defense aircraft fell back 7.8% in November (+29.9% y/y), after their 43.5% bounce in October. Overall transportation sector orders fell 1.2% (-6.7% y/y) and total durable goods orders excluding transportation were still down, by 0.4% (+3.9% y/y) after a 1.0% decline in September. Among transportation equipment industries other than defense aircraft, motor vehicles and parts were up 0.2% (-0.7% y/y), after a 0.6% rise in October. Nondefense aircraft orders rose 0.6% m/m but were down 28.5% y/y; they had risen 0.8% in October.

Orders in other sectors were mostly down again last month. Primary metals orders fell 1.4% (3.2% y/y), after their October decline of 1.8%. Fabricated metal products were down 0.6% (+8.2% y/y) in November after a 0.3% October increase. Computer and electronics products orders fell 1.8% (-1.7% y/y) after a slim 0.1% rise. "All other" durable goods were off 0.1% (+6.9% y/y) after a 0.4% fall the previous month.

Machinery orders were an exception, gaining 0.9% in November (0.8% y/y), a partial rebound from their October drop of 2.0%. Electrical machinery and appliance orders were flat in November (6.2% y/y) after a 4.0% drop in October.

Durable goods shipments fell 0.4% last month (2.9% y/y) after their modest 0.1% fall in October, revised from +0.1%. Excluding transportation equipment, shipments were off 0.1% (+4.4% y/y) after a 0.3% decline. Total order backlogs rose 0.4% (+11.6% y/y) in November, after a 0.5% increase the month before. Excluding transportation, backlogs were up 0.3% (+6.6% y/y) after a 0.4% increase. Durable goods inventories rose 0.4% (+6.2% y/y), the same as a slightly revised October increase. Excluding the transportation sector, inventories were up 0.2% (4.3% y/y) in each November and October.

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 Nov Oct Sep Y/Y 2013 2012 2011
New Orders (SA, %) -0.7 0.3 -0.7 0.3 5.2 4.1 11.0
  Transportation -1.2 3.3 -3.1 -6.7 7.9 8.9 14.9
Total Excluding Transportation -0.4 -1.0 0.3 3.9 4.0 2.1 9.5
  Nondefense Capital Goods 0.5 -0.1 -4.8 -5.5 8.7 3.7 15.3
    Excluding Aircraft 0.0 -1.9 -1.1 1.8 5.0 2.1 11.6
Shipments -0.4 -0.1 0.3 2.9 3.7 6.4 9.4
Inventories 0.4 0.4 0.5 6.2 3.8 4.5 10.8
Unfilled Orders 0.4 0.5 0.4 11.6 7.0 3.6 10.0
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