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Economy in Brief

U.S. Durable Goods Orders Decline; Core Capital Goods Bookings Strengthen
by Tom Moeller  May 25, 2018

New orders for durable goods fell 1.7% (7.8 y/y) during April following a 2.7% March increase, revised from 2.6%. Expectations had been for a 1.2% decline in the Action Economics Forecast Survey.

A 6.1% decline (+7.7% y/y) in orders for transportation equipment pulled the overall figure lower. It reversed the 6.9% rise in March. Aircraft orders alone declined 24.0%. They were accompanied, however, by a 1.8% rise in orders for motor vehicles and parts. Excluding the transportation sector altogether, durable goods orders rose 0.9% following a 0.4% rise. It was the third consecutive monthly increase.

Orders for nondefense capital goods declined 6.8% (+8.5% y/y) and reversed most of the 8.8% rise during March. Orders excluding aircraft increased by 1.0%, however, and reversed the 0.9% March decline. The level of orders has risen 13.4% from its low in May 2016. Defense capital goods orders increased 7.5% (-29.5% y//y) and reversed the prior month's 7.8% decline.

Within the other durable goods sectors, electrical equipment bookings improved 2.6% (8.1% y/y), about as they did in each of the prior two months. Fabricated metals orders increased 2.0% (12.0% y/y) following a 1.2% gain. Orders for primary metals increased 1.3% (17.4% y/y) following even stronger increases in both of the prior two months. Computer & electronic equipment orders rose 1.1% (8.0% y/y) following a 1.5% rise. That rise was powered by a 5.3% strengthening in orders for computers & related products which remained down by 12.2% y/y. Machinery orders declined 0.8% (+2.5% y/y) after a 3.2% drop.

Shipments of durable goods eased 0.1% (+7.3% y/y) owing to a 2.1% decline (+5.5% y/y) in transportation equipment. Shipments excluding transportation equipment rose 1.0% (8.2% y/y). Unfilled durable orders rose 0.5% (3.7% y/y), up for the fourth month in the last five. Backlogs excluding the transportation sector gained 0.4% (4.7% y/y) as they did in March. Durable goods inventories increased 0.3% (4.9% y/y) after a 0.2% gain. Inventories outside of the transportation sector rose 0.3% (5.7% y/y) following two months of 0.5% increase.

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 2017 2016 2015
New Orders (SA, % chg) -1.7 2.7 4.5 7.8 5.4 -1.7 -4.6
  Transportation -6.1 6.9 10.8 7.7 3.4 -0.7 -6.3
Total Excluding Transportation 0.9 0.4 1.3 7.9 6.5 -2.3 -4.2
  Nondefense Capital Goods -6.8 8.8 3.5 8.5 9.1 -5.8 -11.8
    Excluding Aircraft 1.0 -0.9 1.6 5.9 6.7 -4.5 -5.5
Shipments -0.1 0.7 0.7 7.3 4.0 -2.4 -0.8
Unfilled Orders 0.5 0.8 0.4 3.7 2.0 -1.2 -2.7
Inventories 0.3 0.2 0.5 4.9 4.6 -3.0 0.9
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