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Economy in Brief

U.S. Durable Goods Orders Back Off
by Tom Moeller  May 26, 2015

New orders for durable goods dipped 0.5% during April following a revised 5.1% March jump, earlier reported as 4.0%. A 2.5% decline (-5.1% y/y) in transportation sector orders led the total lower as it reflected a 6.1% drop in aircraft & parts bookings. Defense aircraft orders fell 12.8% (-4.5% y/y) after more than doubling in March. Nondefense aircraft orders declined 4.0% (+3.3% y/y) following a 40.7% surge. Motor vehicle & parts orders were off 0.3% (+10.9% y/y). Durable goods orders excluding the transportation sector improved 0.5% (-0.9% y/y), roughly as they did the prior month. Expectations were for a 0.6% dip in orders for total durable goods 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.

Machinery orders jumped 3.1% (-5.5% y/y) following two months of decline. Orders for both fabricated & primary metals also recovered strongly following several months of shortfall. These gains were offset, however, by a 1.5% decline (-3.0% y/y) in orders for electrical equipment & appliances. Orders for computers & electronic products also fell 3.6% (+3.5% y/y) after a 7.7% jump.

Nondefense capital goods orders improved 0.3% (-0.8% y/y) following an upwardly revised 7.2% jump. Orders excluding the notably volatile aircraft sector gained 1.0% (-1.4% y/y) after a 1.5% rise.

Shipments of durable goods slipped 0.1% (+3.4% y/y) following a 1.5% gain. Shipments excluding transportation edged 0.1% higher (0.6% y/y) after a 0.2% improvement. Unfilled orders were unchanged (+7.1% y/y) for a second consecutive month. Backlogs less the transportation sector dipped 0.2% (+3.4% y/y), down for the third straight month. Inventories of durable goods gained 0.2% (5.0% y/y) following no change, and excluding transportation they rose 0.1% (3.8% y/y) for a second straight 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 Apr Mar Feb Apr Y/Y 2014 2013 2012
New Orders (SA, %) -0.5 5.1 -3.5 -2.3 6.8 2.2 6.3
  Transportation -2.5 15.2 -7.3 5.1 6.1 6.5 16.6
Total Excluding Transportation 0.5 0.6 -1.7 -0.9 7.2 0.1 2.0
  Nondefense Capital Goods 0.3 7.2 -6.0 -0.8 6.6 2.8 10.8
    Excluding Aircraft 1.0 1.5 -5.1 -1.4 6.3 -1.0 7.6
Shipments -0.1 1.5 -1.1 3.4 4.8 2.0 6.3
Inventories 0.2 0.0 0.3 5.0 6.1 2.4 3.8
Unfilled Orders -0.0 0.1 -0.6 7.1 11.4 6.4 7.5
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