U.S. Durable Goods Orders Decline With Transportation Bookings

New orders for durable goods fell 2.1% last month following an unrevised 1.9% May rise. A 0.4% increase had been the Consensus expectation. Transportation sector orders led the fall and slumped 8.5% (+9.5% y/y). Bookings for aircraft & parts fell 26.0% (+11.4% y/y) and reversed the prior month's jump. Nondefense aircraft orders fell 28.9% (+41.1% y/y) while defense fell 20.5% (-17.6% y/y). Lower orders for motor vehicles & parts added to the decline with a 1.4% drop (+6.8% y/y).

Outside of the transportation sector, orders improved a slight 0.1% after the 0.7% May gain. However, trend growth is slowing. Electrical machinery orders rose 0.4% (2.1% y/y) after a 15.9% gain last year but machinery orders fell 2.3% (+4.0% y/y) following last year's 22.8% recovery. Orders for computers fell 0.8% (+5.3% y/y) and the y/y gain compares to 30.0% growth last summer. In the nondefense capital goods sector, the 4.1% orders' decline owed to the drop in aircraft, but nondefense orders less aircraft still slipped 0.4%. The 5.6% y/y gain compares to 20.8% growth at its peak in the Spring of 2010.

Shipments of durable goods rose 0.5% and repeated its modest May rise. The 7.6% y/y growth just exceeded growth during 2010 and roughly equaled the gain in production of durable goods. Shipments of motor vehicles and parts rose a lessened 6.2% y/y. Less transportation altogether orders grew 9.0% y/y, about the same as during all of last year.

As the level of orders remained higher than shipments, unfilled orders continued to rise. Growth slowed last month to 0.2% yet that still left them 6.5% higher than last year. Less transportation the y/y gain was a stronger 13.3% due to a one-third surge in machinery and a nearly one-quarter jump in electrical equipment. The rate of inventory accumulation slowed considerably last month to 0.4% (12.1% y/y).

The durable goods figures are available in Haver's USECON database. The expectation figure is in the AS1REPNA database.