Global| Jun 26 2017U.S. Durable Goods Orders Drop, But Trend Improvement Remains in Place
by:Tom Moeller
|in:Economy in Brief
Summary
New orders for durable goods declined 1.1% during May following an unrevised 0.9% April fall. Despite the decline, orders increased 2.7% y/y after falling 1.7% during all of last year. A 0.6% decrease in orders had been expected in [...]
New orders for durable goods declined 1.1% during May following an unrevised 0.9% April fall. Despite the decline, orders increased 2.7% y/y after falling 1.7% during all of last year. A 0.6% decrease in orders had been expected in the Action Economics Forecast Survey.
The decline in durable good orders was led by a 3.4% fall (-2.5% y/y) in transportation bookings, which followed a 1.8% drop. The decline was paced by a 30.8% plunge (+11.6% y/y) in orders for defense aircraft. Civilian aircraft orders were off 11.7% (-37.4% y/y). Motor vehicle & parts orders rose 1.2% (5.0% y/y) after increasing 0.5%.
Electrical equipment orders increased 1.0% (3.6% y/y) following a 2.0% shortfall. Machinery orders gained 0.6% (9.5% y/y), but orders for computers & electronic products slipped 0.2% (-0.1% y/y). Computer orders were off 3.2% (-5.5% y/y), down sharply for the second month in three. Communication equipment orders retreated 3.1% (-3.0% y/y) after a 3.6% rise. Orders for electrical equipment increased 1.0% (3.6% y/y) after a 2.0% fall. Fabricated metals orders eased 0.2% (+8.0% y/y), but primary metal orders gained 0.3% (10.2% y/y).
Nondefense capital goods orders declined 2.4% (-3.2% y/y), about the same as in April. Orders excluding aircraft eased 0.2% and have been stable for four months. The 5.0% y/y increase compared, however, to sharp declines in 2015 and 2016.
Shipments of durable goods increased 0.8% (4.0% y/y) and excluding transportation they improved 0.2% (4.9% y/y). Order backlogs slipped 0.2% (-1.6% y/y) while excluding transportation, unfilled orders improved 0.3% (3.0% y/y). Inventories of durable goods gained 0.2% (1.6% y/y) and also strengthened 0.2% (0.3% y/y) excluding the transportation sector.
The durable goods figures are available in Haver's USECON database. The Action Economics consensus forecast figure is in the AS1REPNA database.
| Durable Goods NAICS Classification | May | Apr | Mar | May Y/Y | 2016 | 2015 | 2014 |
|---|---|---|---|---|---|---|---|
| New Orders (SA, %) | -1.1 | -0.9 | 2.4 | 2.7 | -1.7 | -4.6 | 4.7 |
| Transportation | -3.4 | -1.8 | 5.4 | -2.5 | -3.4 | -6.2 | 8.2 |
| Total Excluding Transportation | 0.1 | -0.5 | 0.9 | 5.5 | -0.7 | -3.6 | 2.9 |
| Nondefense Capital Goods | -2.4 | -2.5 | 1.9 | -3.2 | -7.1 | -11.0 | 0.9 |
| Excluding Aircraft | -0.2 | 0.2 | 0.0 | 5.0 | -4.6 | -4.3 | 0.3 |
| Shipments | 0.8 | -0.3 | -0.1 | 4.0 | -1.6 | -0.6 | 3.8 |
| Unfilled Orders | -0.2 | 0.2 | 0.3 | -1.6 | -1.7 | -2.0 | 8.3 |
| Inventories | 0.2 | 0.2 | 0.3 | 1.6 | -0.7 | 1.6 | 4.7 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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