• Orders again surprise to upside in November with upward revision to October.

• Seventh consecutive monthly increase in orders.

• Shipments rose; inventories jumped; order backlogs eased.

Manufacturers' orders for durable goods increased 0.9% m/m (3.8% y/y) in November on top of an upwardly revised 1.8% m/m gain in October (initially 1.3%). A 0.7% m/m gain had been expected by the Action Economics Forecast Survey. This was the seventh consecutive monthly increase. New orders have risen 45.8% since their recession low in April and are just 0.8% below their pre-COVID February level.

Orders for nondefense capital goods excluding aircraft, a leading indicator of business capital spending, also rose further, increasing 0.4% m/m (+6.5% y/y) in November with a significant upward revision to October (to 1.6% m/m from the initially reported 0.8% m/m gain). This was the seventh consecutive monthly increase. From their April low, nondefense capital goods orders excluding aircraft have risen 15.7% and are 6.1% above their pre-COVID January level.

Shipments of core capital goods, a reliable coincident indicator of business spending on equipment, rose 0.4% m/m (+5.9% y/y) in November following an upwardly revised 2.6% monthly jump in October (initially +2.4% m/m). The November figure was the highest level of core capital goods shipments on record, dating back to 1992. The October/November level of core shipments is 16.5% annualized above the Q3 average, auguring another strong gain in business spending on equipment in the fourth quarter.

Orders for transportation equipment rose 1.9% m/m (+1.8% y/y) in November on top of a 1.5% m/m gain in October. Orders for motor vehicles and parts orders rebounded, rising 2.4% m/m in November following a 2.5% m/m fall in October (revised from -3.2% m/m). Aircraft orders rose another 7.3% m/m after their 45.9% monthly jump in October–with all the November gain coming from defense orders. Computer and electronic product orders edged up 0.4% m/m in November after an upwardly revised 4.2% monthly surge in October, the largest monthly gain since October 2018.

Total shipments increased 0.3% m/m (+1.9% y/y) in November after an upwardly revised 1.5% monthly increase in October (initially 1.3%). Shipments of transportation products also rose 0.3% m/m (-1.4% y/y), the same gain as in October. Shipments excluding transportation rose 0.3% m/m on top of an upwardly revised 2.2% m/m jump in October (initially 2.0%). Holding back shipments in November were a 1.1% m/m decline in shipments of computers and a 1.1% m/m drop in shipments of electrical equipment.

Unfilled orders for durable goods slipped 0.1% m/m (-6.2% y/y). Excluding transportation, they rose 0.7% m/m (2.4% y/y). Inventories of durable goods rose 0.9% m/m (1.1% y/y), their largest monthly gain since July 2108. Excluding transportation, inventories increased 0.5% m/m (-2.2% y/y).

The durable goods figures are available in Haver's USECON database. The Action Economics consensus forecast figure is in the AS1REPNA database.