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Economy in Brief

U.S. Durable Goods Orders Surge in August
by Tom Moeller  September 27, 2021

• Transportation orders jump with aircraft strength.

• Core capital goods orders improve modestly.

• Shipments ease but order backlogs & inventories rise again.

Factory sector improvement continued during August. Manufacturers' orders for durable goods increased 1.8% (18.1% y/y) following a 0.5% July rise, revised from -0.1%. A 0.7% August increase had been expected in the Action Economics Forecast Survey.

A 5.5% surge (24.4% y/y) in transportation equipment orders accounted for last month's overall increase. Orders for nondefense aircraft rose by roughly three-quarters after falling 36.3% in July. Motor vehicles & parts orders fell 3.1% (-5.1% y/y) after rising 5.3% in July. Excluding transportation, orders improved 0.2% in August (15.6% y/y) following a 0.8% July gain.

Nondefense capital goods orders excluding aircraft improved 0.5% during August (13.7% y/y) after gaining 0.3% in July, revised from no change. Elsewhere in the report, orders were mixed. Orders for primary metals declined 1.5% (28.5% y/y) while orders for fabricated metal products rose 2.0% (20.4% y/y) after a 0.9% improvement. Machinery orders weakened 1.2% (+18.0% y/y) after a 3.0% gain. To the upside, electrical equipment & appliance orders rebounded 1.3% (17.9% y/y) and recovered July's decline. Computer & electronic product orders increased 1.4% (6.4% y/y) after little change in July.

Durable goods shipments fell 0.5% (+9.4% y/y) during August after rising 2.0% in July, revised from 2.2%. Shipments of nondefense capital goods excluding aircraft improved 0.7% (11.7% y/y), the sixth straight month of firm increase. Shipments of transportation products overall fell 2.7% (-0.1% y/y) with fewer motor vehicle shipments, while shipments excluding transportation products rose 0.5% (13.7% y/y) after two months of 1.2% increase.

Unfilled orders for durable goods rose 1.0% in August (3.7% y/y) following a 0.5% July rise. Order backlogs excluding transportation improved 1.1% (15.1% y/y) and have been strengthening for more than a year, continuing to reflect shortages of key component products.

Inventories of durable goods rose 0.8% (7.1% y/y) in August, the same as in July. Excluding transportation, inventories rose 0.7% (8.2% y/y) after a 0.9% July rise, following 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.

Navigating Delta Headwinds on the Path to a Full Recovery by Fed Governor Lael Brainard can be found here.

Durable Goods NAICS Classification Aug Jul Jun Aug Y/Y % 2020 2019 2018
New Orders (SA, % chg) 1.8 0.5 0.8 18.1 -13.6 3.5 5.1
    Transportation 5.5 -0.4 1.4 24.4 -35.5 13.2 1.7
  Total Excluding Transportation 0.2 0.8 0.6 15.6 -1.2 -1.3 6.9
    Nondefense Capital Goods Excl. Aircraft 0.5 0.3 1.0 13.7 1.0 -0.1 5.9
Shipments -0.5 2.0 1.6 9.4 -6.3 -1.4 5.7
    Nondefense Capital Goods Excl. Aircraft 0.7 0.9 0.6 11.7 -0.3 0.7 6.3
Unfilled Orders 1.0 0.5 0.8 3.7 -8.2 10.2 -1.6
Inventories 0.8 0.8 0.9 7.1 0.5 5.9 4.4
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