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Economy in Brief

U.S. Durable Goods Orders Decline; Core Capital Goods Orders Improve
by Tom Moeller  June 26, 2019

Activity in the manufacturing sector weakened during May. New orders for durable goods declined 1.3% (-2.8% y/y) following a 2.8% April fall, revised from -2.1%. A 0.1% easing in May orders had been expected in the Action Economics Forecast Survey.

A 4.6% decline (-8.4% y/y) in transportation sector orders prompted the decline in total new orders and added to a 7.6% April drop. Nondefense aircraft & parts orders fell more than one-quarter m/m. Defense aircraft orders fell 15.3% (-11.7% y/y). New orders for motor vehicles & parts improved 0.6% (9.1% y/y) following a 3.2% decline. Orders excluding transportation rose 0.3% (0.2% y/y).

Orders for nondefense capital goods weakened 2.3% (-9.7% y/y) and added to the prior month's 6.9% drop. Nondefense capital goods orders excluding aircraft rose 0.4% (1.3% y/y) following a 1.0% weakening.

Elsewhere in the durable goods report it was indicated that primary metals orders rose 0.4% (-5.9% y/y), but orders for fabricated metals eased 0.4% (-0.5% y/y). Orders for computers & related products rose 0.8% (4.6% y/y. Communication equipment orders rose 1.7% (0.2% y/y), but orders for computers & related products fell 2.4% (-2.6% y/y). Orders for machinery gained 0.7% (0.4% y/y). Electrical equipment orders slipped 0.4% (+3.8% y/y) after three straight months of strong increase.

Shipments of durable goods increased 0.4% (2.4% y/y) following two months of decline. Transportation sector shipments were off 0.3% (+3.4% y/y) and shipments excluding transportation gained 0.4% (1.9% y/y). Unfilled orders for durable goods eased 0.5% (+0.9% y/y) while excluding transportation, order backlogs fell 0.2% (+1.9% y/y). Inventories of durable goods increased 0.5% (5.0% y/y), the largest increase since January, prompted by a 1.6% gain (6.9% y/y) in transportation sector inventories. Inventories excluding transportation were little changed (4.1% y/y) for a second straight month.

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 2018 2017 2016
New Orders (SA, % chg) -1.3 -2.8 1.7 -2.8 7.9 5.4 -1.7
  Transportation -4.6 -7.6 6.0 -8.4 9.8 3.2 -0.6
Total Excluding Transportation 0.3 -0.1 -0.5 0.2 6.9 6.5 -2.3
  Nondefense Capital Goods -2.3 -6.9 2.6 -9.7 5.5 9.1 -5.8
    Excluding Aircraft 0.4 -1.0 0.3 1.3 6.0 6.7 -4.5
Shipments 0.4 -1.6 -0.5 2.4 7.1 4.0 -2.3
Unfilled Orders -0.5 -0.2 0.1 0.9 3.9 1.9 -1.1
Inventories 0.5 0.4 0.3 5.0 4.8 4.5 -3.0
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