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Economy in Brief

U.S. Durable Goods Orders Rebound as Aircraft Orders Jump; Trend Growth Weakens
by Tom Moeller  February 26, 2015

New orders for durable goods improved 2.8% (5.4% y/y) following sharp declines in four of the previous five months. Orders for commercial aircraft more-than-doubled m/m (-3.1% y/y) but motor vehicle & parts bookings fell 2.9% (+8.9% y/y). New orders excluding the transportation sector edged 0.3% higher (4.5% y/y) following three consecutive monthly declines. Total durable goods orders were expected to rise 1.6% in the Action Economics Forecast Survey. During the last ten years, there has been an 88% correlation between the y/y change in orders and the change in real GDP.

Outside of the transportation sector, machinery orders rebounded 1.9% (-2.1% y/y) following several months of sharp decline. Orders for computers & electronic products improved 1.0% (5.0% y/y), the first rise in five months. These gains were offset by a 3.4% decline (+1.2% y/y) in orders for electrical equipment & appliances to the lowest level since May. Fabricated metal orders slipped 0.2% (+11.0% y/y) and primary metals orders edged down 0.3% (+2.6% y/y), the fourth consecutive monthly shortfall.

Orders for nondefense capital goods rebounded 9.5% (3.5% y/y) owing to the jump in aircraft bookings. Orders outside of the aircraft sector gained 0.6% (4.2% y/y), but they were down 3.5% from the August peak. Defense capital goods orders fell 5.2% (+9.2% y/y), down sharply for the third straight month.

Shipments of durable goods back pedaled 1.1% (+5.6% y/y) last month and slipped 0.8% (+4.2% y/y) excluding the transportation sector. Unfilled orders for durables were off 0.2% (+9.8% y/y) while excluding transportation they were roughly stable (+5.9% y/y). Inventories of durable goods gained 0.4% (6.0% y/y) following four straight months of 0.5% increase. Inventories outside of transportation inventories sector increased 0.4%. The 4.6% y/y rise was the strongest since July 2012.

The durable goods figures are available in Haver's USECON database. The Action Economics consensus forecast figure is in the AS1REPNA database.

Has the Pendulum Swung Back to Neutral? Looking at Credit Availability from the Federal Reserve Bank of Atlanta can be found here.

Durable Goods NAICS Classification Jan Dec Nov Jan Y/Y 2014 2013 2012
New Orders (SA, %) 2.8 -3.7 -2.2 5.4 6.0 5.2 4.1
  Transportation 9.1 -10.1 -4.0 7.5 8.4 7.9 8.9
Total Excluding Transportation 0.3 -0.9 -1.3 4.5 5.0 4.0 2.1
  Nondefense Capital Goods 9.5 -10.3 -1.5 3.5 6.1 8.7 3.7
    Excluding Aircraft 0.6 -0.7 -0.5 4.2 4.4 5.0 2.1
Shipments -1.1 1.5 -0.7 5.6 5.0 3.7 6.4
Inventories 0.4 0.5 0.5 6.0 5.8 3.8 4.5
Unfilled Orders -0.2 -0.9 0.2 9.8 9.9 7.0 3.6
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