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Economy in Brief

U.S. Durable Goods Orders Rebound in May
by Tom Moeller  June 24, 2021

• Transportation orders surge, while ex-transportation improves further.

• Core capital goods orders ease following earlier strength.

• Shipments rise along with order backlogs & inventories.

The factory sector remains on a firm footing. Manufacturers' orders for durable goods jumped 2.3% (41.6% y/y) during May following a 0.8% April decline, revised from -1.3%. A 3.0% rise had been expected in the Action Economics Forecast Survey.

Strength in transportation equipment orders propelled last month's increase with a 7.6% jump, more than doubling y/y. The gain was driven by a surge in nondefense aircraft orders as well as a 2.1% increase (95.6% y/y) in orders for motor vehicles & parts. Excluding transportation, orders improved 0.3% (25.2% y/y) following a 1.7% rise in April, revised from 1.0%.

Orders for nondefense capital goods orders excluding aircraft eased 0.1% (22.7% y/y) following a 2.7% April gain, revised from 2.3%. Elsewhere in the report, orders were mixed. Orders for primary metals rose 2.2% (46.9% y/y) but orders for fabricated metal products fell 1.1% (+34.1% y/y). Electrical equipment orders surged 1.3% (23.8% y/y) but machinery orders eased 0.4% (+23.8% y/y). Computer & electronic product orders slipped 0.3% (+8.9% y/y).

Durable goods shipments rose 0.4% in May (31.6% y/y) after easing marginally in April, revised from +0.6%. Shipments of nondefense capital goods excluding aircraft rose 0.9% (20.4% y/y). Shipments of transportation products overall eased 0.4% (+69.0% y/y), while shipments excluding transportation products rose 0.7% (20.9% y/y).

Unfilled orders for durable goods rose 0.8% (-1.4% y/y). Order backlogs excluding transportation rose 1.6% (11.9% y/y).

Inventories of durable goods rose 0.7% (3.3% y/y) in May for the second consecutive month. Excluding transportation, inventories surged 1.0% (2.8% y/y), up from inventory decumulation last spring & summer.

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 % 2020 2019 2018
New Orders (SA, % chg) 2.3 -0.8 1.3 41.6 -13.6 3.5 5.1
    Transportation 7.6 -6.6 -3.1 106.4 -35.5 13.2 1.7
  Total Excluding Transportation 0.3 1.7 3.3 25.2 -1.2 -1.3 6.9
    Nondefense Capital Goods Excl. Aircraft -0.1 2.7 1.6 22.7 1.0 -0.1 5.9
Shipments 0.4 -0.0 2.7 31.6 -6.3 -1.4 5.7
    Nondefense Capital Goods Excl. Aircraft 0.9 1.0 1.6 20.4 -0.3 0.7 6.3
Unfilled Orders 0.8 0.4 0.5 -1.4 -8.2 10.2 -1.6
Inventories 0.7 0.7 1.1 3.3 0.5 5.9 4.4
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