Global| Jul 26 2018U.S. Durable Goods Orders Rebound, Powered by Aircraft
by:Tom Moeller
|in:Economy in Brief
Summary
Improvement in factory sector activity continues. New orders for durable goods strengthened 1.0% (3.2% y/y) during June after declines in the prior two months. The 0.3% May shortfall was revised from -0.6%. The latest gain fell short [...]
Improvement in factory sector activity continues. New orders for durable goods strengthened 1.0% (3.2% y/y) during June after declines in the prior two months. The 0.3% May shortfall was revised from -0.6%. The latest gain fell short of expectations for a 3.0% increase in the Action Economics Forecast Survey. Orders declined at a 1.4% annual rate during the last three months.
A 2.2% increase (-6.2% y/y) in transportation equipment orders powered the rise in overall orders as it reversed a 1.4% May shortfall. Aircraft & parts orders surged 8.7% following a 2.0% drop. The gain reflected a 20.2% surge in defense aircraft bookings which were strong for the third straight month. Orders for motor vehicles & parts improved 4.4% (6.4% y/y) and reversed May's decline. Excluding the transportation sector altogether, durable goods orders rose 0.4% (9.1% y/y) after a 0.3% rise, revised from a 0.3% fall. Non-transportation orders have surged at a 10.7% annual rate during the last three months.
Orders for nondefense capital goods increased 2.3% (-7.7% y/y) after a 2.2% May decline. Orders excluding aircraft increased 0.6% (8.3% y/y) following a 0.7% rise, revised from -0.2%. Defense capital goods orders decreased 11.6% (+4.7% y/y) after a 16.7% rise.
Within other durable goods sectors, electrical equipment bookings gained 1.5% (9.1% y/y) after a 0.5% easing. Orders for computers & electronic components increased 0.6% (10.3% y/y) for a second straight month. Computer & related product orders declined 4.1% (-17.4% y/y) following a 0.8% fall. Communication equipment orders held steady (14.6% y/y) after a 6.7% jump. Orders for machinery rose 0.2% (6.0% y/y) after a 1.7% jump. Fabricated metals orders inched 0.1% higher (10.2% y/y) following a 1.2% decline. Orders for primary metals fell 0.4% (+18.2% y/y) after a 0.1% slip.
Shipments of durable goods increased 1.7% (7.7% y/y) following a 0.2% rise. Shipments excluding transportation equipment gained 0.6% (8.2% y/y) for the second straight month. Unfilled durable goods orders rose 0.4% (3.6% y/y), up for the fifth consecutive month. Backlogs excluding the transportation sector gained 0.5% (5.7% y/y). Durable goods inventories slipped 0.1% (+4.6% y/y), down for the first month since December 2016. Inventories outside of the transportation sector rose 0.5% (5.6% y/y), the largest increase in three months.
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 | Jun | May | Apr | Jun Y/Y | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|
| New Orders (SA, % chg) | 1.0 | -0.3 | -1.0 | 3.2 | 5.4 | -1.7 | -5.0 |
| Transportation | 2.2 | -1.4 | -6.1 | -6.2 | 3.4 | -0.7 | -6.3 |
| Total Excluding Transportation | 0.4 | 0.3 | 1.9 | 9.1 | 6.5 | -2.3 | -4.2 |
| Nondefense Capital Goods | 2.3 | -2.2 | -6.7 | -7.7 | 9.1 | -5.8 | -11.8 |
| Excluding Aircraft | 0.6 | 0.7 | 2.0 | 8.3 | 6.7 | -4.5 | -5.5 |
| Shipments | 1.7 | 0.2 | -0.0 | 7.7 | 4.0 | -2.4 | -0.8 |
| Unfilled Orders | 0.4 | 0.5 | 0.6 | 3.6 | 2.0 | -1.2 | -2.7 |
| Inventories | -0.1 | 0.3 | 0.4 | 4.6 | 4.6 | -3.0 | 0.9 |
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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