U.S. Advance Durable Goods Orders Unexpectedly Rose in August
by:Sandy Batten
|in:Economy in Brief
Summary
- Durable goods orders unexpectedly rose 2.9% m/m after declines in both June and July.
- Aircraft orders rose 27% m/m, their first increase in three months.
- Orders excluding transportation rose 0.4% m/m in August on top of a solid 1.0% monthly gain in July.
- Core capital goods orders increased 0.6% following a 0.8% rise in July; shipments fell 0.3% m/m, their first decline in four months.
Durable goods orders unexpectedly rose 2.9% m/m (7.6% y/y) in August following a 2.7% monthly decline in July. A 0.4% m/m decline was expected by the Action Economics Forecast Survey. While a 27% m/m increase in aircraft orders in August played a major role in the overall rebound, orders excluding transportation also surprised forecasters, rising 0.4% m/m (3.6% y/y). The July/August average of ex transportation orders is 6.8% at an annual rate above the Q2 average.
Transportation orders were up 7.9% m/m (15.9% y/y) in August following monthly declines in both June and July, again largely reflecting aircraft orders. Machinery orders increased 1.3% m/m in August on top of a 1.4% monthly increase in June. Orders for fabricated metal products increased 0.7% m/m after a 0.9% m/m gain in July. Orders for communications equipment rose 1.5% m/m, their fourth consecutive solid monthly gain. In contrast, orders for computers fell 2.0% m/m in August, nearly reversing their 2.6% monthly gain in July.
Shipments of core capital goods (nondefense capital goods shipments excluding aircraft) are a reliable coincident indicator of business spending on equipment in the national accounts. They slid 0.3% m/m in August after a solid 0.6% monthly gain in July. Still, the July/August average is up 3.3% annualized from the Q2 average. More encouragingly, core capital goods orders rose 0.6% m/m in August on top of a 0.8% m/m gain in July. The July/August average of core capital goods orders is up 5.6% at an annual rate from the Q2 average.
Total manufacturing shipments edged down 0.1% m/m (+2.4% y/y) in August following a 0.9% monthly gain in July. Shipments of durable goods fell 0.2% m/m (+4.5% y/y) after a 1.6% monthly jump in July. Shipments of nondurable goods were essentially unchanged in August (+0.3% y/y) after a 0.3% m/m increase in July.
Unfilled durable goods orders increased 0.7% m/m (7.7% y/y) in August after having been unchanged in July. Total manufacturing inventories were unchanged in August (+1.4% y/y) following a 0.2% monthly gain in July. Inventories of durable goods were essentially unchanged in July while inventories of nondurable goods rose 0.2% m/m.
The factory sector data are available in Haver’s USECON database. The Action Economics Forecast Survey is in the AS1REPNA database.
Sandy Batten
AuthorMore in Author Profile »Sandy Batten has more than 30 years of experience analyzing industrial economies and financial markets and a wide range of experience across the financial services sector, government, and academia. Before joining Haver Analytics, Sandy was a Vice President and Senior Economist at Citibank; Senior Credit Market Analyst at CDC Investment Management, Managing Director at Bear Stearns, and Executive Director at JPMorgan. In 2008, Sandy was named the most accurate US forecaster by the National Association for Business Economics. He is a member of the New York Forecasters Club, NABE, and the American Economic Association. Prior to his time in the financial services sector, Sandy was a Research Officer at the Federal Reserve Bank of St. Louis, Senior Staff Economist on the President’s Council of Economic Advisors, Deputy Assistant Secretary for Economic Policy at the US Treasury, and Economist at the International Monetary Fund. Sandy has taught economics at St. Louis University, Denison University, and Muskingun College. He has published numerous peer-reviewed articles in a wide range of academic publications. He has a B.A. in economics from the University of Richmond and a M.A. and Ph.D. in economics from The Ohio State University.
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