U.S. Durable Goods Orders Lower in January, Trend Strong

Durable goods orders fell 0.9% in January following an upwardly revised gain in December of 1.4%. Consensus expectations had been for no change.

Orders for transportation equipment weakened during the last two months, down 5.3% in January and 2.2% in December due to huge declines in commercial and defense aircraft orders. Less transportation, durable goods orders rose 0.8% (13.2% y/y) last month following an upwardly revised 2.8% December increase.

Nondefense capital goods orders rose 0.2% but less aircraft orders rose 2.9% after an upwardly revised 3.3% December spurt.

Orders for computers & electronic products fell 1.2% (+11.1% y/y) following the upwardly revised 8.3% surge in December. Electrical equipment orders jumped 13.1% (14.6% y/y) and machinery orders rose 0.3% (18.3% y/y). Primary metals orders logged a third consecutive month of strength with a 1.6% rise (27.2% y/y) and orders for fabricated metals rose 1.2% as well (+7.6% y/y).

Inventories of durable goods jumped 0.9% (8.6% y/y). Combined with a 1.5% (12.4% y/y) surge in shipments, which followed a 2.8% December jump, the I/S ratio fell to the lowest level since last May.

Unfilled orders slipped 0.2%, the first monthly decline in a year (+8.9% y/y). As shipments surged during the last two months, the ratio of backlogs to shipments reversed nearly all of last year's gains.