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Economy in Brief

U.S. Durable Goods Report: Strong Headline, Weaker Details
by Gerald D. Cohen  February 21, 2019

New orders for durable goods increased 1.2% (3.5% year-on-year) during December following an upwardly-revised 1.0% gain in November (this report was delayed as a result of the government shutdown). A 1.7% increase had been expected in the Action Economics Forecast Survey. A 4.8% jump in volatile aircraft orders (-24.8% y/y) as well as a 2.1% increase in motor vehicles (11.6% y/y) drove the gain. Excluding the transportation sector, durable goods bookings edged up 0.1% (3.5% y/y). Nondefense capital goods orders less aircraft fell 0.7% (+2.5% y/y) and were down at a 3.4% annual rate in the fourth quarter. In Q3, core capital goods orders grew at an 8.0% pace. This data suggests weakness ahead in equipment spending.

Machinery orders declined 0.4% in December (+0.2% y/y). Electrical equipment edged down 0.1% (+3.9% y/y) and primary metals decreased 0.9% (+8.2% y/y). Orders for computers were unchanged (7.8% y/y), fabricated metals up 0.3% (6.0% y/y), and other durable goods grew 0.9% (-0.8% y/y).

Shipments of durable goods increased 0.8% during December (7.1% y/y) following an upwardly-revised 1.0% gain (was 0.7%). Excluding the transportation sector, shipments gained 0.4% (4.4% y/y). Nondefense capital goods shipments excluding aircraft grew 0.5% (3.7% y/y) and were up at a 2.3% annual rate in Q4. In Q3 core capital goods shipments rose at 6.9% annual rate.

Unfilled orders for durable goods eased 0.1% (+3.8% y/y); excluding transportation, order backlogs were unchanged (4.5% y/y). Inventories of durable goods rose 0.2% (4.5% y/y). Excluding transportation, inventories increased 0.4% (5.4% y/y).

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 Dec Nov Oct Dec Y/Y 2018 2017 2016
New Orders (SA, % chg) 1.2 1.0 -4.3 3.5 7.8 5.4 -1.7
  Transportation 3.3 3.4 -12.4 3.5 9.7 3.4 -0.7
Total Excluding Transportation 0.1 -0.2 0.4 3.5 6.8 6.5 -2.3
  Nondefense Capital Goods 3.7 0.3 -4.7 0.3 5.6 9.1 -5.8
    Excluding Aircraft -0.7 -1.0 0.5 2.5 5.9 6.7 -4.5
Shipments 0.8 1.0 -0.3 7.1 7.0 4.0 -2.4
Unfilled Orders -0.1 -0.2 -0.2 3.8 3.8 2.0 -1.2
Inventories 0.2 0.4 0.2 4.5 4.5 4.6 -3.0
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