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Economy in Brief

U.S. Durable Goods Orders Decline is Broad-Based
by Tom Moeller  March 25, 2015

New orders for durable goods fell 1.4% during February (+0.6% y/y) following a 2.0% January increase, initially estimated as 2.8%. An 8.9% decline (-22.4 y/y) in nondefense aircraft & parts bookings led total orders downward. Total durable goods orders were expected to rise 0.3% 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, new orders were off 0.4% (+2.3 y/y), falling 4.4% since a September peak. Machinery orders declined 1.8% (-5.2% y/y), down 10.5% since a June peak. Orders for computers & electronic products slipped 0.1% (+5.8% y/y), off 2.9% since an August high. Fabricated metal orders declined 2.0% (+3.0% y/y) for the second straight month. These declines were offset by a 4.1% rebound (4.4% y/y) in orders for electrical equipment & appliances which came after a 5.1% drop. Orders are 5.2% lower than the September high. A 1.0% recovery (0.8% y/y) in primary metals orders left them, nevertheless, 6.8% below the September peak.

Nondefense capital goods orders declined 2.6% (+2.1% y/y) following an 8.8% rise. Orders excluding the notably volatile aircraft sector fell 1.4% and were 5.3% below the August peak.

Shipments of durable goods slipped 0.2% (+3.9% y/y) following a 1.4% decline. Shipments excluding transportation edged 0.1% lower (+2.8% y/y) after a 1.5% drop. Unfilled orders were off 0.5% (+8.9% y/y) following a 0.3% decline. Backlogs less the transportation sector fell 0.2% (+5.4 y/y) for the second straight month. Inventories of durable goods gained 0.3% (5.3% y/y) for the second consecutive month but excluding transportation they were fairly steady (+3.9% y/y).

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

Monetary Policy Lessons and the Way Ahead is from Fed Vice Chairman Stanley Fischer and it can be found here.

Durable Goods NAICS Classification Feb Jan Dec Feb Y/Y 2014 2013 2012
New Orders (SA, %) -1.4 2.0 -3.7 0.6 6.1 5.2 4.1
  Transportation -3.5 8.8 -10.0 -3.0 8.4 7.9 8.9
Total Excluding Transportation -0.4 -0.7 -0.8 2.3 5.0 4.0 2.1
  Nondefense Capital Goods -2.6 8.8 -10.1 2.1 6.1 8.7 3.7
    Excluding Aircraft -1.4 -0.1 -0.5 2.1 4.4 5.0 2.1
Shipments -0.2 -1.4 1.5 3.9 5.0 3.7 6.4
Inventories 0.3 0.3 0.5 5.3 5.8 3.8 4.5
Unfilled Orders -0.5 -0.3 -0.9 8.9 9.9 7.0 3.6
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