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Economy in Brief

U.S. Durable Goods Orders Post Surprising Increase in September
by Tom Moeller  October 27, 2020

• The factory sector continues to strengthen.

• Business investment leads the improvement.

• Shipments rise modestly; orders backlogs ease.

Manufacturers' orders for durable goods strengthened 1.9% (-1.9% y/y) during September following an unrevised 0.4% August gain. A 0.3% gain had been expected in the Action Economics Forecast Survey. New orders have risen 41.5% since the recession low in April.

Business investment also has firmed. Nondefense capital goods orders excluding aircraft rose 1.0% (4.5% y/y), the fifth consecutive month of strong increase. Orders have risen 12.1% during the last five months.

Orders for transportation equipment rose 4.1% (-8.7% y/y) led by a surge in aircraft & parts bookings. Motor vehicles & parts orders gained 1.5% (5.2% y/y). Primary metals orders strengthened 4.0% (-1.6% y/y) while fabricated metals orders rose 1.2% (-1.8% y/y). Computer electronic product orders improved 0.6% (5.7% y/y). Offsetting these gains, orders for electrical equipment & appliances declined 2.0% (-4.1% y/y) and machinery orders slipped 0.3% (-2.5% y/y).

Shipments of core capital goods rose 0.3% (2.5% y/y) to the highest level since November 2013. Total shipments edged 0.3% higher (-0.6% y/y). Shipments of transportation products improved 0.5% (-2.4% y/y). Shipments excluding transportation rose 0.2% (0.3% y/y). Machinery shipments fell 1.1% (-3.6% y/y) while electrical equipment & appliance shipments fell 1.2% (-4.9% y/y).

Unfilled orders for durable goods slipped 0.2% (-6.3% y/y). Excluding transportation, they rose 0.7% (0.9% y/y).

Inventories of durable goods rebounded 0.4% (0.7% y/y) following three straight months of decline. Excluding transportation, inventories rose 0.2% (-3.0% y/y) after falling for five consecutive months.

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 % 2019 2018 2017
New Orders (SA, % chg) 1.9 0.4 11.8 -1.9 -1.5 7.1 5.0
    Transportation 4.1 -0.9 35.3 -8.7 -4.8 9.2 4.7
  Total Excluding Transportation 0.8 1.0 3.3 1.7 0.4 5.9 5.1
    Nondefense Capital Goods Excl. Aircraft 1.0 2.1 2.6 4.5 1.7 4.6 4.1
Shipments 0.3 -0.3 7.6 -0.6 0.8 6.6 2.6
    Nondefense Capital Goods Excl. Aircraft 0.3 1.5 3.0 2.5 2.4 5.7 1.1
Unfilled Orders -0.2 -0.6 -0.7 -6.3 -1.8 3.9 2.8
Inventories 0.4 -0.1 -0.8 0.7 4.1 5.2 3.4
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