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Economy in Brief

U.S. Durable Goods Orders Little Changed in November
by Sandy Batten  December 23, 2015

Durable goods orders were little changed in November (+1.2%y/y) following a 2.9%m/m jump in October (revised down slightly from the initially reported 3.0%m/m rise). Action Economics' Forecast Survey had anticipated a 0.7%m/m decline. A swing in orders for nondefense aircraft and parts was the major source of the November slowdown. Nondefense aircraft orders slumped 22.2%m/m in November after having surged 78.7%m/m in October. The timing of the Dubai airshow was likely behind this wide monthly swing in aircraft orders. Excluding orders in the transportation sector, other orders slipped 0.1%m/m (-1.9%y/y) after a 0.5%m/m increase in October. Market expectations looked for an unchanged reading.

Capital goods orders also moderated in November after a good start to the fourth quarter in October. Core capital goods orders (capital goods orders excluding defense and aircraft) slipped 0.4%m/m following a downwardly revised 0.6%m/m increase in October (originally +1.3%m/m). This left these orders up 1.3% AR from the third quarter average. Core capital goods shipments remained tepid in November. They fell 0.5%m/m after a downwardly revised 1.0%m/m fall in October (originally -0.5%m/m). This left these shipments down 4.8% AR from the third quarter average and augurs a weak reading for business equipment spending in the Q4 national accounts.

Across the major sectors, orders for primary metals fell 2.7%m/m, and those for machinery slumped 1.5%m/m in November. Orders for electrical equipment recovered from their October swoon, jumping up 2.6%m/m. And even with the drop in nondefense aircraft orders, transportation orders managed a 0.4%m/m increase, boosted by rises in both motor vehicles and parts, and defense aircraft.

In other parts of the report, total shipments increased 0.9%m/m (1.8%y/y) versus a 1.2%m/m decline in October. Unfilled orders added to their October gains, rising 0.2% (-2.2%y/y) in November. And inventories fell for the fifth consecutive month, declining 0.3%m/m (-0.2%y/y) in November, the same monthly decline as in 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 Nov Y/Y 2014 2013 2012
New Orders (SA, %) 0.03 2.88 -0.83 1.20 6.8 2.2 6.3
  Transportation 0.37 7.76 -2.24 7.77 6.1 6.5 16.6
Total Excluding Transportation -0.15 0.50 -0.13 -1.93 7.2 0.1 2.0
  Nondefense Capital Goods -6.34 12.07 -5.98 -5.59 6.6 2.8 10.8
    Excluding Aircraft -0.41 0.65 0.47 -1.77 6.3 -1.0 7.6
Shipments 0.89 -1.20 0.26 1.80 4.8 2.0 6.3
Inventories -0.27 -0.32 -0.62 -0.19 6.1 2.4 3.8
Unfilled Orders 0.16 0.31 -0.48 -2.18 11.4 6.4 7.5
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