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Economy in Brief

U.S. Durable Goods Orders Ease in July
by Tom Moeller  August 25, 2021

• Transportation orders fall sharply with fewer aircraft orders.

• Core capital goods orders hold steady.

• Shipments, order backlogs & inventories continue to rise.

Manufacturers' orders for durable goods slipped 0.1% (+17.6% y/y) during July following an unrevised 0.8% June increase. The latest decline matched expectations in the Action Economics Forecast Survey.

A 2.2% fall (+19.8% y/y) in transportation equipment orders accounted for last month's overall decline. It was driven by a roughly one-half fall in nondefense aircraft orders which followed three months of strong increase. A 5.8% rise (-6.0% y/y) in orders for motor vehicles & parts offset some of the decline. Excluding transportation, orders improved 0.7% (16.7% y/y) following two months of 0.6% increase.

Nondefense capital goods orders excluding aircraft held steady last month (+15.6% y/y) after surging 1.0% in June, revised from 0.5%. Elsewhere in the report, orders were mixed. Orders for primary metals surged 2.7% (35.5% y/y) while orders for fabricated metal products improved 0.3% (17.2% y/y). Machinery orders strengthened 2.9% (11.8% y/y). To the downside, electrical equipment & appliance orders fell 1.8% (+14.5% y/y) and computer & electronic product orders eased 0.4% (+6.7% y/y).

Durable goods shipments surged 2.2% in July (10.6% y/y) after strengthening 1.6% in June, revised from 1.0%. Shipments of nondefense capital goods excluding aircraft rose 1.0% (13.4% y/y), the fifth straight month of strong increase. Shipments of transportation products overall strengthened 4.6% (2.3% y/y), while shipments excluding transportation products rose 1.2% (14.5% y/y), the same as in June.

Unfilled orders for durable goods rose 0.3% in July (2.0% y/y) following a 0.8% June increase. Order backlogs excluding transportation improved 1.1% (14.2% y/y) and have been strengthening for more than a year, reportedly due to shortages of key component products.

Inventories of durable goods rose 0.6% (6.0% y/y) in July. The 6.0% y/y increase builds on a 0.5% rise during all of 2020. Excluding transportation, inventories rose 0.8% (7.1% y/y) after a 1.0% June rise. That followed inventory decumulation during all of last year.

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 Jul Jun May Jul Y/Y % 2020 2019 2018
New Orders (SA, % chg) -0.1 0.8 3.2 17.6 -13.6 3.5 5.1
    Transportation -2.2 1.4 10.0 19.8 -35.5 13.2 1.7
  Total Excluding Transportation 0.7 0.6 0.6 16.7 -1.2 -1.3 6.9
    Nondefense Capital Goods Excl. Aircraft 0.0 1.0 0.6 15.6 1.0 -0.1 5.9
Shipments 2.2 1.6 0.4 10.6 -6.3 -1.4 5.7
    Nondefense Capital Goods Excl. Aircraft 1.0 0.6 1.0 13.4 -0.3 0.7 6.3
Unfilled Orders 0.3 0.8 1.0 2.0 -8.2 10.2 -1.6
Inventories 0.6 0.9 1.0 6.0 0.5 5.9 4.4
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