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Economy in Brief

U.S. Durable Goods Orders Firm in May
by Tom Moeller  June 27, 2022

• Core capital goods orders improve again.

• Shipments surge with strength in aircraft.

• Order backlogs & inventories increase.

Manufacturers' new orders for durable goods exhibited unexpected improvement in May, posting a 0.7% gain (10.6% y/y) after a 0.4% April increase. The gain contrasted with an expected 0.1% rise in the in the Action Economics Forecast Survey.

New orders for nondefense capital goods excluding aircraft, key measure of capital goods spending, improved 0.5% in May following an unrevised 0.3% April gain. These orders improved 9.8% y/y.

Transportation equipment orders rose 0.8% (16.3% y/y) after a 0.7% April increase. Motor vehicle & parts orders improved 0.5% (16.2% y/y) after a 0.1% uptick. Defense aircraft orders rose 8.1% (9.7% y/y) after rising 2.4%.

Excluding transportation, orders rose 0.7% (8.1% y/y) in May following a 0.2% April improvement. Machinery orders rose 1.1% (10.5% y/y), about as they did in April. Electrical equipment & appliance orders fell 0.9% (+6.5% y/y), the same as in April. Computer & electronic product orders improved 0.5% (5.8% y/y) after holding steady in April. Primary metals orders surged 3.1% (13.5% y/y) but fabricated metals bookings held steady (8.2% y/y).

Shipments of durable goods surged 1.3% (12.7% y/y) after a 0.3% April improvement, revised from 0.1%. Transportation shipments rose 2.1% (16.1% y/y) following a 0.5% rise. Excluding transportation, shipments improved 1.0% (11.3% y/y) during May after a 0.2% April gain. Machinery shipments jumped 1.6% (14.7% y/y) while shipments of computers and electronic products gained 0.3% (5.5% y/y). Shipments of electrical equipment and appliances rose 1.9% (12.1% y/y) while primary metals shipments strengthened 2.7% (21.1% y/y).

The advance reading on shipments of nondurable goods indicated a 2.2% rise during May (17.2% y/y) following a 0.9% rise. Shipments from all manufacturing industries rose 1.8% (14.9% y/y) in May after a 0.6% April. Capital goods shipments excluding defense and aircraft increased 0.8% (11.7% y/y) in May, the same as in April.

Unfilled orders for durable goods rose 0.3% last month (7.3% y/y) following two months of 0.5% increase. Unfilled orders are not calculated for nondurable goods.

Durable goods inventories increased 0.6% (9.9% y/y) following a 0.9% April gain. Nondurable goods inventories rose 2.3% (13.1% y/y) after strong gains in three of the prior four months.

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.

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