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Economy in Brief

U.S. Durable Goods Orders Decline
by Tom Moeller  June 27, 2018

New orders for durable goods fell 0.6% during May (+9.2% y/y) following a 1.0% April decline, revised from -1.7%. A 0.7% drop had been expected in the Action Economics Forecast Survey. During the last three months, orders have risen at a 4.5% annual rate, down from the 13.8% pace as of February.

A 1.0% decline (+12.1% y/y) in transportation equipment orders weakened the overall orders figure as it followed a 6.1% April shortfall. Aircraft & parts orders declined 1.4% following a 24.5% drop. Orders for motor vehicles and parts also were weak and fell 4.2% (+1.2% y/y). Excluding the transportation sector altogether, durable goods orders fell 0.3% (+7.8% y/y) following a 1.9% gain, revised from 0.9%. During the last three months these orders have risen at an 8.6% annual rate.

Orders for nondefense capital goods fell 2.0% (+10.5% y/y) after a 6.5% April decline. Orders excluding aircraft eased 0.2% (+6.1% y/y) after a 2.3% gain. Defense capital goods orders increased 15.1% (41.3% y/y) following an 8.8% rise.

Within the other durable goods sectors, electrical equipment bookings fell 1.5% (+5.2% y/y) and followed three months of strong increase. Fabricated metals orders were off 1.2% (+10.8% y/y) following a 3.3% gain. Orders for primary metals slipped 0.4% (+18.1% y/y), also following three months of material improvement. Computer & electronic equipment orders slipped 0.1% (+8.3% y/y) following a 1.9% rise. Orders for computers & related products, however, declined 1.1% (-12.7% y/y) after a 5.9% rise. Machinery orders improved 0.3% (3.2% y/y) after a 1.7% rise.

Shipments of durable goods eased slightly (+5.6% y/y) following stability in April. Shipments excluding transportation equipment were little changed (7.4% y/y). Unfilled durable orders rose 0.5% (4.6% y/y), up for the fourth consecutive month. Backlogs excluding the transportation sector gained 0.5% (5.2% y/y). Durable goods inventories increased 0.3% (5.0% y/y) for the second straight month. Inventories outside of the transportation sector rose 0.2% (5.7% y/y), the weakest increase since December 2016.

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 May Apr Mar May Y/Y 2017 2016 2015
New Orders (SA, % chg) -0.6 -1.0 2.7 9.2 5.4 -1.7 -4.6
  Transportation -1.0 -6.1 6.9 12.1 3.4 -0.7 -6.3
Total Excluding Transportation -0.3 1.9 0.5 7.8 6.5 -2.3 -4.2
  Nondefense Capital Goods -2.0 -6.5 8.7 10.5 9.1 -5.8 -11.8
    Excluding Aircraft -0.2 2.3 -1.0 6.1 6.7 -4.5 -5.5
Shipments -0.1 0.0 0.8 5.6 4.0 -2.4 -0.8
Unfilled Orders 0.5 0.6 0.8 4.6 2.0 -1.2 -2.7
Inventories 0.3 0.3 0.2 5.0 4.6 -3.0 0.9
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