U.S. Durable Goods Orders in January Dragged Down by Nondefense Aircraft
by:Sandy Batten
|in:Economy in Brief
Summary
- January was the mirror image of December.
- Total orders slumped 4.5% m/m but rose 0.8% m/m when subtracting nondefense aircraft.
- Nondefense aircraft orders plummeted 54.6% m/m after 105.6% surge in December.
- Both core capital goods orders and shipments rebounded.
New durable goods orders fell 4.5% m/m (+3.0% y/y) in January after a downwardly revised 5.1% m/m surge in December (previously 5.6%). The Action Economics Forecast Survey had looked for a 4.0% monthly decline. The outsized decline in January and increase in December were due completely to a large swing in orders for nondefense aircraft. These orders plummeted 54.6% m/m in January after having surged 105.6% m/m in December. Subtracting those, the remainder of orders rebounded in January, rising 0.8% m/m following a 0.1% m/m decline in December. Total transportation orders (aircraft and motor vehicles) fell 13.3% m/m (+5.8% y/y) in January versus a downwardly revised 15.8% m/m gain in December (previously +16.7% m/m). Total orders excluding all of transportation rose 0.7% m/m (+1.6% y/y) after a downwardly revised 0.4% m/m decline in December (previously -0.1% m/m).
Orders increased in each major sector other than transportation in January, led by a 1.6% m/m gain in machinery orders, their first increase in three months. Orders for electrical equipment and appliances rose 0.6% m/m, their third consecutive monthly gain. Orders for defense goods rebounded, rising 4.5% m/m after a 1.5% m/m decline in December. After having declined in both November and December, core capital goods orders (orders for nondefense capital goods excluding aircraft) increased 0.8% m/m in January.
Shipments of durable goods edged down 0.1% m/m (+6.8% y/y), their first monthly decline since August 2021. By contrast, shipments of nondurable goods rebounded in January, rising 1.4% m//m (5.5% y/y) after a 1.7% m/m decline in December. Total manufacturing shipments increased 0.7% m/m (+6.2% y/y) in January, reversing the 0.6% m/m decline in December. Transportation shipments declined 1.7% m/m in January to offset the 1.7% m/m rise in December. Excluding those, the remainder of shipments of durable goods increased 0.8% m/m in January versus a 0.2% m/m decline in December. Core capital goods shipments, a reliable coincident indicator of business spending on equipment in the national accounts, rose a solid 1.1% m/m in January after having declined by a combined 0.7% in November and December. The January rebound provides a very good starting point for Q1.
Unfilled durable goods orders were unchanged in January after a 1.1% m/m rise in December. Manufacturing inventories were also unchanged in January after a 0.4% m/m increase in December. Durable goods inventories slipped 0.1% m/m in January while nondurable goods inventories increased 0.2% m/m.
Manufacturers’ orders and shipments of durable goods, as well as nondurable goods, are available in Haver’s USECON database. Unfilled orders and inventories are also included. The Action Economics forecast data are 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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