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Economy in Brief

U.S. Durable Goods Orders Rebound; Capital Goods Orders Surge
by Tom Moeller  April 25, 2019

New orders for durable goods increased 2.7% (2.3% y/y) during March after a 1.1% February decline, revised from -1.6%. A 0.8% increase had been expected in the Action Economics Forecast Survey.

A 7.0% (1.2% y/y) strengthening in transportation sector orders powered the overall rise, as they rebounded from a 2.9% decline. The gain was led by a 31.2% strengthening in orders for nondefense aircraft & parts which reversed February's drop. Motor vehicle & parts orders increased 2.1% (10.1% y/y) following no change. Excluding the transportation sector altogether, durable goods orders improved 0.4% (2.9% y/y) following slight declines in three of the prior four months.

Orders for nondefense capital goods increased 6.5% (-4.4% y/y) and reversed the prior month's 5.0% decline. Excluding aircraft, these so-called "core" orders improved 1.3% (5.3% y/y), the largest increase since July.

Computer & electronic products orders gained 2.2% (7.4% y/y) led by a 9.0% jump (16.1% y/y) in communications equipment. Computer & electronic products orders declined 4.5% (+1.7% y/y). Orders for machinery gained 0.3% (3.9% y/y) while orders for electrical equipment, appliances & components ticked 0.1% higher (1.9% y/y) after two straight months of 1.1% increase. Primary metals orders fell 0.2% (+0.3% y/y) and fabricated metals products slipped 0.2% (+0.3% y/y).

Shipments of durable goods rose 0.3% (5.1% y/y) for a second month. Excluding the transportation sector, shipments eased 0.1% (+4.0% y/y). Shipments of core capital goods fell 0.2% (+4.4 y/y), following a 0.6% rise.

Unfilled orders for durable goods rose 0.3% (3.0% y/y) after a 0.2% decline. Transportation sector backlogs increased 0.4% (2.5% y/y). Outside of transportation, unfilled orders were unchanged (4.0% y/y) and have been over the last three months.

Inventories of durable goods increased 0.3% (5.0% y/y) in March following a 0.4% rise. Transportation sector inventories gained 0.1% (4.8% y/y) following two straight months of 1.0% increase. Outside of the transportation sector, inventories rose 0.4% (5.1% y/y) following a 0.1% uptick.

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 Mar Feb Jan Mar Y/Y 2018 2017 2016
New Orders (SA, % chg) 2.7 -1.1 0.1 2.3 7.8 5.4 -1.7
  Transportation 7.0 -2.9 0.4 1.2 9.6 3.4 -0.7
Total Excluding Transportation 0.4 -0.2 -0.1 2.9 6.8 6.5 -2.3
  Nondefense Capital Goods 6.5 -5.0 1.5 -4.4 5.6 9.1 -5.8
    Excluding Aircraft 1.3 0.1 0.9 5.3 5.9 6.7 -4.5
Shipments 0.3 0.3 -0.5 5.1 7.0 4.0 -2.4
Unfilled Orders 0.3 -0.2 0.1 3.0 3.8 2.0 -1.2
Inventories 0.3 0.4 0.5 5.0 4.7 4.6 -3.0
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