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Economy in Brief

U.S. Durable Goods Orders Falter; Core Capital Goods Orders Drop Again
by Tom Moeller  October 24, 2019

Manufacturers' orders for durable goods declined 1.1% (-5.4% y/y) during September following a 0.3% August rise, revised from 0.2%. A 0.9% decline had been expected in the Action Economics Forecast Survey. Orders for nondefense capital goods excluding aircraft, a key indicator of business investment plans, fell 0.5% last month after a 0.6% decline. During the past year, these orders have eased 0.8%, following double-digit y/y growth late in 2017.

The level of durable goods orders overall was pulled lower by a 2.7% decline (-14.3% y/y) in transportation sector orders. Orders for commercial aircraft & parts dropped 11.8% after a 17.8% August decline. Motor vehicle & parts orders fell 1.6% (+0.1% y/y) for the second straight month.

Orders outside of the transportation sector eased 0.3% in September and reversed the prior month's increase. These orders were unchanged y/y compared to 9.0% y/y growth early last year. Primary metals orders rose 0.3% (-5.5% y/y). Fabricated metals orders declined 1.5%, but improved by a lessened 2.5% y/y. Electrical equipment & appliance orders rose 0.9% and y/y growth was fairly steady at 4.2%. Machinery orders rose 0.2% but fell 1.5% y/y. Orders for computers & electronic products declined 0.9% last month (-0.4% y/y). Annual growth was double-digit as of June of last year. Computer & related product orders surged 1.4%, but fell 11.0% y/y. Communications equipment orders improved 1.5% (0.2% y/y) after two months of sharp decline.

Durable goods shipments declined 0.4% (-1.0% y/y), down for the third straight month. Shipments outside of transportation held steady, and y/y growth of 0.8% compared to 8.7% as of July of 2018. Unfilled orders were fairly steady (-1.8% y/y). Order backlogs outside of transportation also were stable. Year-to-year growth of 0.5% compared to 5.6% as of August 2018. Inventories rose an accelerated 0.5% (4.7% y/y). Outside of the transportation sector, inventories held steady (1.5% y/y) with transportation sector inventories up 11.6% 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 Sep Aug Jul Sep Y/Y 2018 2017 2016
New Orders (SA, % chg) -1.1 0.3 2.1 -5.4 7.9 5.4 -1.7
  Transportation -2.7 0.2 7.3 -14.3 9.8 3.2 -0.6
Total Excluding Transportation -0.3 0.3 -0.5 0.0 6.9 6.5 -2.3
  Nondefense Capital Goods -2.8 -3.1 5.2 -9.1 5.5 9.1 -5.8
    Excluding Aircraft -0.5 -0.6 0.0 -0.8 6.0 6.7 -4.5
Shipments -0.4 -0.1 -1.2 -1.0 7.1 4.0 -2.3
Unfilled Orders -0.0 0.2 0.1 -1.8 3.9 1.9 -1.1
Inventories 0.5 0.2 0.4 4.7 4.8 4.5 -3.0
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