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Economy in Brief

U.S. Durable Goods Orders Increase As Aircraft Bookings Soar
by Tom Moeller  July 27, 2015

New orders for durable goods surged 3.4% during June (-2.8% y/y) following a 2.1% May decline, earlier reported as -1.8%. The increase compared to expectations for a 3.1% rise in the Action Economics Forecast Survey. Last month's gain was powered by a two-thirds jump in orders for nondefense aircraft & parts (1.9% y/y) which recaptured two months of sharp decline. Motor vehicle orders gained 0.2% (10.7% y/y) after a 0.3% shortfall. Orders excluding transportation equipment rose 0.8% (-4.5% y/y), only the second increase in the last nine months. During the last ten years, there has been an 88% correlation between the y/y change in durable goods orders and the change in real GDP.

Machinery orders improved 1.4% (-10.7% y/y) following two months of modest improvement. Orders for computers & electronic products edged 0.2% higher (3.7% y/y) after a downwardly revised 0.8% increase. Electrical equipment orders increased 2.8% (-7.1% y/y) following deepened declines of 3.7% and 2.8% during the prior two months.

Nondefense capital goods orders jumped 9.4% (-4.5% y/y) with the rise in aircraft bookings. Orders excluding the aircraft sector gained 0.9% (-6.6% y/y), making up most of the declines during the prior two months.

Shipments of durable goods improved 0.1% (1.7% y/y) following two months of 0.3% decline. Shipments excluding transportation edged minimally lower (-1.1% y/y), also following two months of 0.3% decline. Unfilled orders improved 0.1% (4.7% y/y) in the wake of two months of decline. Backlogs less the transportation sector remained unchanged (0.7% y/y) after declines during five of the prior six months. Inventories of durable goods increased 0.4% (3.8% y/y) following a 0.2% decline and excluding transportation orders recovered 0.3% (2.8% y/y) after a like decline.

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 Jun May Apr Jun Y/Y 2014 2013 2012
New Orders (SA, %) 3.4 -2.1 -1.7 -2.8 6.8 2.2 6.3
  Transportation 8.9 -6.1 -4.0 0.9 6.1 6.5 16.6
Total Excluding Transportation 0.8 -0.1 -0.6 -4.5 7.2 0.1 2.0
  Nondefense Capital Goods 9.4 -6.8 -2.2 -4.5 6.6 2.8 10.8
    Excluding Aircraft 0.9 -0.4 -0.7 -6.6 6.3 -1.0 7.6
Shipments 0.1 -0.3 -0.3 1.7 4.8 2.0 6.3
Inventories 0.4 -0.2 0.2 3.8 6.1 2.4 3.8
Unfilled Orders 0.1 -0.5 -0.2 4.7 11.4 6.4 7.5
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