U.S. Durable Goods Orders Strength Is Broad-based

Improvement in new orders is broadening within the factory sector. New orders for durable goods jumped 3.6% (7.6% y/y) during May following a like increase in April, initially reported as 3.3%. A 2.5% rise in orders for last month had been expected. As in April, higher orders in the transportation sector led the increase with a 10.2% gain (19.2% y/y). It reflected a 39.2% jump (60.5% y/y) in aircraft & parts bookings. Nondefense aircraft orders increased by one-half (85.9% y/y) while defense aircraft orders gained 3.7% (0.5% y/y. Orders for motor vehicles and parts fell 1.2% (+7.3% y/y).

Orders excluding the transportation sector rose 0.7% (2.8% y/y), which followed a 1.7% April jump. The broad-based gain reflected a 2.7% increase (-5.2% y/y) in orders for computers & electronic products. Communications equipment orders jumped 12.6% (19.0% y/y) and computers & related products gained 1.0% (-15.1% y/y). Orders for electrical equipment strengthened by 1.4% (-2.3% y/y) while machinery orders rose 1.2% (6.5% y/y). Primary metal orders gained 0.9% (6.0% y/y) but orders for fabricated metals were off 0.9% (+2.7% y/y). Nondefense capital goods orders surged for a second month. The 9.3% gain (15.9% y/y) added to its 3.5% April rise. Orders excluding aircraft & parts, a measure of "core" business investment, gained 1.1% (3.2% y/y), the third consecutive month of a similar increase.

Shipments of durable goods improved 1.2% last month (2.4% y/y) to the series' record high. Transportation sector shipments jumped 3.6% last month and rose 7.5% y/y. Outside of the transportation sector, shipments ticked up 0.2% (0.3% y/y). Nondefense capital goods shipments recovered 6.0% (4.5% y/y) to a record high; excluding aircraft, they gained 1.7% (1.6% y/y).

Unfilled orders for durable goods rose 0.8% (3.1% y/y) in May. Outside of the transportation sector, backlogs gained 0.8% (-0.8% y/y). Inventories of durable goods ticked up 0.1% (3.1% y/y) last month. Excluding transportation, inventories also nudged up 0.1% (0.2% y/y).

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	Y/Y	2012	2011	2010
New Orders	3.6	3.6	-5.9	7.6	4.1	11.0	23.2
Transportation	10.2	8.3	-15.0	19.2	8.9	14.9	49.5
Total Excluding Transportation	0.7	1.7	-1.6	2.8	2.1	9.5	15.2
Nondefense Capital Goods	9.3	3.5	-8.9	15.9	3.7	15.3	27.5
Excluding Aircraft	1.1	1.2	1.1	3.2	2.1	11.6	12.9
Shipments	1.2	-0.6	0.9	2.4	6.4	9.4	11.0
Inventories	0.1	0.3	-0.1	3.1	4.5	10.8	9.4
Unfilled Orders	0.8	0.3	-0.6	3.1	3.7	10.0	5.2