Global| Jul 28 2004U.S. Durable Goods Orders Up But Below Projections
by:Tom Moeller
|in:Economy in Brief
Summary
Durable goods orders in June rose 0.7%. The rise was half the Consensus projection for a 1.5% gain. Part of the shortfall was made up for by an upward revision of the May figure to a 0.9% decline versus -1.6% reported initially. An [...]
Durable goods orders in June rose 0.7%. The rise was half the Consensus projection for a 1.5% gain. Part of the shortfall was made up for by an upward revision of the May figure to a 0.9% decline versus -1.6% reported initially.
An upward revision to transportation sector orders accounted for about all of the May revision. Transportation orders rose another 4.2% in June following two months of decline. Orders for defense aircraft surged 79.1% in June after a 23.8% jump in May.
Excluding the transportation sector altogether durable goods orders fell 0.6% (+13.5% y/y), down for the third straight month.
Weakness in orders has been widespread recently. Computers & electronic products orders fell 1.0% (+9.7% y/y) in June for the second decline in three months. Communications equipment orders have been notably weak. Electrical equipment, appliance & component orders dropped 4.4% (+1.8% y/y) following a like decline in May. Primary metals orders fell for the second month in three (+28.7% y/y). Machinery orders have been about flat for two months (18.4% y/y) after a 4.1% April skid.
During the last ten years there has been a 74% correlation between the y/y change in orders for non-defense capital goods less aircraft and the change in industrial production of capital goods.
Nondefense capital goods orders less aircraft managed a 1.2% rise (10.8% y/y) following two months of decline.
Shipments of durable goods rose 0.7% (10.7% y/y) following two months of moderate decline. Shipments excluding the transportation sector rose 0.7% (+12.6% y/y).
Durable inventories rose 0.7% (1.9% y/y), the same as the upwardly revised May.
| NAICS Classification | June | May | Y/Y | 2003 | 2002 | 2001 |
|---|---|---|---|---|---|---|
| Durable Goods Orders | 0.7% | -0.9% | 11.3% | 2.6% | -1.7% | -10.5% |
| Non-defense Capital Goods | 1.1% | -1.4% | 11.1% | 5.6% | -7.2% | -15.5% |
by Tom Moeller July 28, 2004
The index of mortgage applications compiled by the Mortgage Bankers Association ticked 0.6% higher last week after falling 4.0% the prior week. Applications so far for July are 9.6% above the June average.
Purchase applications rose 1.0% after two down weeks. The July average is 4.7% higher than June.
During the last ten years there has been a 63% correlation between the y/y change in purchase applications and the change in new plus existing home sales.
Applications to refinance mortgages fell for the third straight week. Refi's in July are 18.4% ahead of June.
The effective interest rate on a conventional 30-Year mortgage ticked up to 6.24% versus 6.22% the prior week. The effective rate on a 15-year mortgage also was about stable at 5.69%.
The Mortgage Bankers Association surveys between 20 to 35 of the top lenders in the U.S. housing industry to derive its refinance, purchase and market indexes. The weekly survey accounts for more than 40% of all applications processed each week by mortgage lenders. Visit the Mortgage Bankers Association site here.
| MBA Mortgage Applications (3/16/90=100) | 07/23/04 | 07/16/04 | Y/Y | 2003 | 2002 | 2001 |
|---|---|---|---|---|---|---|
| Total Market Index | 621.4 | 617.9 | -36.1% | 1,067.9 | 799.7 | 625.6 |
| Purchase | 444.8 | 440.3 | 4.2% | 395.1 | 354.7 | 304.9 |
| Refinancing | 1,648.8 | 1,651.1 | -60.2% | 4,981.8 | 3,388.0 | 2,491.0 |
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.
