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Economy in Brief
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by Tom Moeller May 24, 2019
Factory sector activity continued to weaken last month. New orders for durable goods fell 2.1% during April and were unchanged y/y. A 1.7% rise in orders during March was revised from a 2.7% gain reported initially. Expectations in the Action Economics Forecast Survey had been for a 2.0% decline in April durable goods orders.
A 5.9% shortfall (-0.3% y/y) in transportation sector orders led total new orders lower, reversing its March rise. Nondefense aircraft & parts orders fell by one-quarter and they were down by one-third y/y. Defense aircraft orders fell 2.4% (+40.5% y/y). New orders for motor vehicles & parts declined 3.4% (+2.9% y/y) following a 0.4% gain.
Orders for nondefense capital goods weakened 5.0% (-4.3% y/y) and reversed the 2.6% rise during March. Orders excluding aircraft eased 0.9% after two straight 0.3% increases. The y/y increase decelerated to 1.3%, the weakest rise in just over two years. It was below the peak 13.2% y/y rate of increase in September 2017.
Elsewhere in the durable goods sector, primary metals orders declined 0.8% (-4.9% y/y), but orders for fabricated metals increased 0.4% (-1.1% y/y). Computer & electronic product bookings eased 0.4% (+4.8% y/y) due to a 5.5% decline (+7.7% y/y) in communication equipment orders. Orders for computers & related products rose 4.0% (-2.6% y/y). Orders for machinery gained 0.1% and were unchanged y/y. Electrical equipment orders rose 0.9% (2.8% y/y).
Shipments of durable goods declined 1.6% (+2.3% y/y) following a 0.5% fall. A 4.1% weakening (+3.6% y/y) in transportation sector shipments led the total lower. Shipments excluding transportation fell 0.2% (+1.7% y/y). Unfilled orders for durable goods eased 0.1% (+2.1% y/y) both including and excluding transportation. Inventories of durable goods increased 0.4% (5.0% y/y) led by a 1.1% gain in transportation sector inventories. Inventories excluding transportation rose 0.1% (4.7% 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 | Apr | Mar | Feb | Apr Y/Y | 2018 | 2017 | 2016 |
|---|---|---|---|---|---|---|---|
| New Orders (SA, % chg) | -2.1 | 1.7 | -2.6 | -0.0 | 7.9 | 5.4 | -1.7 |
| Transportation | -5.9 | 5.9 | -6.7 | -0.3 | 9.8 | 3.2 | -0.6 |
| Total Excluding Transportation | 0.0 | -0.5 | -0.3 | 0.1 | 6.9 | 6.5 | -2.3 |
| Nondefense Capital Goods | -5.0 | 2.6 | -5.9 | -4.3 | 5.5 | 9.1 | -5.8 |
| Excluding Aircraft | -0.9 | 0.3 | 0.3 | 1.3 | 6.0 | 6.7 | -4.5 |
| Shipments | -1.6 | -0.5 | 0.0 | 2.3 | 7.1 | 4.0 | -2.3 |
| Unfilled Orders | -0.1 | 0.1 | -0.4 | 2.1 | 3.9 | 1.9 | -1.1 |
| Inventories | 0.4 | 0.3 | 0.4 | 5.0 | 4.8 | 4.5 | -3.0 |
