U.S. Durable Goods Order Decline Reflects a Weaker Transportation Sector

New orders for durable goods fell 1.0% during January (+4.6 y/y) following a 5.3% December drop, revised from a 4.3% decline. The latest decline matched expectations in the Action Economics Forecast Survey. A 5.6% drop (+13.6% y/y) in orders for transportation equipment weighed on last month's total. Nondefense aircraft & parts orders fell 20.2% (+56.7% y/y) after December's 22.3% shortfall. Motor vehicle & parts orders also softened, posting a 2.2% drop last month (+3.8% y/y) on the heels of a 6.6% decline.

Outside of the transportation sector, new orders showed mixed performance as a 1.1% gain (1.2% y/y) countered December's 1.9% decline. Fabricated metal orders led the increase with a 7.3% rise (-9.1 y/y). Orders for computers & electronic products followed with a 4.7% rise (1.7% y/y). Working to the downside, primary metal orders were off 2.3% (+7.0% y/y and electrical equipment, appliances & components orders declined 2.1% (+3.7% y/y). Machinery orders slipped 0.4% (+1.5% y/y). Nondefense capital goods orders fell 3.9% (+5.6% y/y) reflecting the weakened aircraft bookings. Excluding aircraft, however, orders improved 1.7% (-0.8% y/y) and reversed December's decline.

Shipments of durable goods were off 0.4% (+3.4% y/y) in January following December's 1.8% fall. Shipments excluding the transportation sector slipped 0.5% (+2.7% y/y), the first material decline in nine months. Unfilled orders ticked 0.1% higher (7.1% y/y) while order backlogs outside of the transportation sector gained 0.3% (5.7% y/y). Inventories of durable goods improved 0.3% (3.7% y/y) after December's 0.9% jump. Inventories outside the transportation sector were roughly unchanged (1.4% y/y).

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

Semiannual Monetary Policy Report to the Congress by Fed Chair Janet L. Yellen can be found here  http://www.federalreserve.gov/newsevents/testimony/yellen20140211a.htm

 Initial claims for unemployment insurance edged down to 336,000 (-8.2% y/y) during the week ended February 15 versus an unrevised 339,000 during the week prior. Expectations had been for 335,000 claims in the Action Economic forecast survey. The four-week moving average of initial claims ticked up to 338,500.

Continuing claims for unemployment insurance in the week ended February 8 increased to 2.981 million (-5.8% y/y). The four-week moving average slipped to 2.960 million and still was near its highest level since early August. The insured rate of unemployment nudged up to 2.3% from a downwardly revised 2.2%. This particular count covers only "regular" programs and does not include all extended benefit and other specialized jobless insurance programs. In the week of February 1, the latest available, the total of all benefit recipients was little-changed at 3.525 million (-36.8% y/y). This broader measure is not seasonally adjusted. It compares to a cycle peak of 12.060 million in January 2010 and pre-recession figures that averaged 2.596 million in 2007.

By state, the insured rate of unemployment continued to vary greatly with Louisiana (1.24%), Tennessee (1.43%),  Florida (1.44%), Texas (1.64%), North Carolina (1.89%), Indiana (2.14%) and Ohio (2.61%) at the low end of the range. At the high end were New York (3.10%), California (3.45%), Massachusetts (3.45%), Wisconsin (3.65%), Illinois (3.78%), Pennsylvania (3.84%) and Connecticut (4.01%). These data are not seasonally adjusted.

Data on weekly unemployment insurance are contained in Haver's WEEKLY database and they are summarized monthly in USECON. Data for individual states are in REGIONW. The expectations figure is from the Action Economics survey, carried in the AS1REPNA database.