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Economy in Brief

U.S. Durable Goods Orders Decline Broadly
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
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