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Economy in Brief

U.S. Durable Goods Orders Edge Higher
by Tom Moeller  September 25, 2020

• Core capital goods orders rise strongly.

• Shipments also were firm, but inventories continued to run off.

Manufacturers' orders for durable goods rose a modest 0.4% (-4.6% y/y) during August following an 11.7% jump in July, revised from 11.2%. A 1.5% gain had been expected in the Action Economics Forecast Survey. Despite strong increases during the last four months, the level of durable goods orders remained 5.4% below February, the month before the recession began.

Business investment is improving. Nondefense capital goods orders excluding aircraft rose 1.8% (2.8% y/y), the fourth consecutive month of strong increase.

Orders for transportation equipment rose 0.5% (-13.1% y/y), a gain held back by a 4.0% decline (+2.1% y/y) in orders for motor vehicles & parts. Also contributing to last month's weak increase in orders was a 1.5% drop (-2.9% y/y) in orders for electrical equipment & appliances. Fabricated metals orders also were off 1.3% (-6.4% y/y). Working 1.5% higher (-1.4% y/y) were machinery orders. Also to the upside, computer & electronic product bookings rose 1.2% (4.6% y/y) after a 3.0% gain and primary metals orders improved 1.2% (-5.9% y/y).

Shipments of core capital goods have been notably strong. Last month they grew 1.5% (1.2% y/y) to the highest level since March 2014. Total shipments eased 0.3% (-1.5% y/y). Shipments of transportation products eased 0.3% (-1.5% y/y) following three months of strong gain. Shipments excluding transportation rose 0.5% (-0.1% y/y). Machinery shipments improved 1.7% (-4.3% y/y), strong for the fourth straight month, but electrical equipment shipments fell 0.7% (-3.4% y/y) after two months of strong increase.

Unfilled orders for durable goods declined 0.6% (-6.1% y/y). Excluding transportation, they improved 0.2% (-0.1% y/y).

Inventories of durable goods eased 0.1%, down for the third straight month. Excluding transportation, inventories fell 0.4% (-3.2% 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 Aug Jul Jun Aug Y/Y % 2019 2018 2017
New Orders (SA, % chg) 0.4 11.7 7.7 -4.6 -1.5 7.1 5.0
    Transportation 0.5 35.2 19.5 -13.1 -4.8 9.2 4.7
  Total Excluding Transportation 0.4 3.2 4.0 0.1 0.4 5.9 5.1
    Nondefense Capital Goods Excl. Aircraft 1.8 2.5 4.3 2.8 1.7 4.6 4.1
Shipments -0.3 7.6 15.2 -1.5 0.8 6.6 2.6
    Nondefense Capital Goods Excl. Aircraft 1.5 2.8 3.7 1.2 2.4 5.7 1.1
Unfilled Orders -0.6 -0.7 -1.4 -6.1 -1.8 3.9 2.8
Inventories -0.1 -0.8 -0.1 0.7 4.1 5.2 3.4
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