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Economy in Brief

U.S. Durable Goods Orders Up Sharply in November
by Sandy Batten  December 23, 2021

• November gain in orders led by a rebound in transportation after two monthly declines.

• Meaningful upward revision to October orders.

• Core capital goods shipments up 6.5% AR in October/November from Q2.

Manufacturers' new orders for durable goods rose 2.5% m/m (15.7% y/y) in November versus and upwardly revised 0.1% m/m gain in October (initially reported as a 0.5% m/m decline). The Action Economics Forecast Survey was expecting a 1.5% m/m increase.

The sharp November increase was led by a 6.5% m/m (19.4% y/y) rebound in transportation orders after having declined in three of the previous four months. Excluding transportation orders, the remainder rose 0.8% m/m (14.1% y/y), the ninth consecutive monthly increase. Orders for motor vehicles and parts increased 1.0% m/m on top of a 5.8% m/m jump in October. Orders for aircraft and parts surged 23.8% m/m in November after having declined in three of the previous four months. Orders for nondefense aircraft jumped 34.1% m/m while orders for defense aircraft rose a more modest 3.0% m/m. Across the other major sectors, orders for primary metals, fabricated metal products, and computers and electronic products rose in November while orders for machinery and electrical equipment fell.

Durable goods shipments rose 0.7% m/m (11.8% y/y) in November, their third consecutive monthly increase and again led by transportation, following a 1.7% m/m gain in October (revised up from 1.5%). Shipments excluding transportation gained 0.5% m/m after a 0.9% monthly increase in October. Shipments excluding defense increased 0.7% m/m on to of a 1.6% rise in October. This report now contains an advance reading on shipments of nondurable goods. They increased 0.5% m/m (17.5% y/y) in November on top of a 2.3% rise in October and a 1.3% increase in September. Shipments in all manufacturing industries increased 0.6% m/m (14.6% y/y) in November following an unrevised 2.0% m/m gain in October.

Also in the report are key readings on capital goods shipments and orders. The shipments figures provide a dependable reading on the course of business spending on equipment in the national accounts. Core (that is, excluding defense and aircraft) capital goods shipments increased 0.3% m/m (10.9% y/y) in November following a 0.4% gain in October. The October/November average is 6.4% annualized above the Q2 average, pointing to another quarter of solid business spending on equipment. Core capital goods orders slipped 0.1% m/m (12.8% y/y) in November, their first monthly decline in nine months.

Unfilled orders for durable goods rose 0.7% m/m (6.2% y/y) in November versus an upwardly revised 0.3% (previously 0.2%) in October. Unfilled orders are not calculated for nondurable goods. Manufacturing inventories increased 0.7% m/m (9.1% y/y) in November, reflecting a 0.6% m/m rise in durable goods inventories and a 0.7% m/m gain in nondurable goods inventories.

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

Durable Goods NAICS Classification Nov Oct Sep Nov Y/Y % 2020 2019 2018
New Orders (SA, % chg) 2.5 0.1 -0.4 15.7 -13.6 3.5 5.2
    Transportation 6.5 -0.3 -2.8 19.4 -35.8 13.3 1.8
  Total Excluding Transportation 0.8 0.3 0.7 14.1 -1.0 -1.4 7.0
    Nondefense Capital Goods Excl. Aircraft -0.1 0.9 1.4 12.8 1.1 -0.1 6.0
Shipments 0.7 1.7 0.6 11.8 -6.0 -1.5 5.8
    Nondefense Capital Goods Excl. Aircraft 0.3 0.4 1.3 10.9 -0.2 0.6 6.4
Unfilled Orders 0.7 0.3 0.7 6.2 -8.4 10.4 -1.9
Inventories 0.6 0.7 1.0 8.5 0.4 5.8 4.4
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