U.S. Durable Goods Orders Were Essentially Unchanged in December

New orders for durable goods were essentially unchanged in December (+4.8% y/y) following a slightly upwardly revised 5.5% monthly gain in November (previously 5.4% m/m). The Action Economics Forecast Survey had expected a 1.5% m/m rise in December. The anemic December figure was due entirely to declines in transportation (-0.9% m/m) and defense (-8.7% m/m). Excluding those two categories, orders rose 1.3% m/m.

The monthly decline in transportation orders was due mostly to a 2.9% m/m decline in orders for defense aircraft. Orders for nondefense aircraft were essentially unchanged and orders for motor vehicles were up 0.4% m/m. Orders for all defense goods slumped 8.7% m/m in December, their third monthly decline in the past four months.

Apart from transportation and defense, other orders posted gains in December. Orders for primary metals advanced 1.4% m/m on top of a 0.9% m/m gain in November. Fabricated metal products orders increased 0.9% m/m after having been unchanged in November. Machinery orders edged up 0.2% m/m in December versus unchanged in November. Orders for computers and electronic products rose 0.4% m/m, the same increase as in November. Orders for electrical equipment and appliances rose 1.8% following a 1.9% monthly increase in November.

Core capital goods orders (that is, nondefense capital goods orders excluding aircraft) increased 0.3% m/m (1.8% y/y) in December following an upwardly revised 1.0% m/m gain in November (previously +0.8% m/m). Core capital goods shipments edged up 0.1% m/m (+1.5% y/y) in December after having declined in each of the previous three months. Core capital goods shipments are a rather reliable coincident indicator of business spending on capital goods in the national accounts.

Shipments of all manufactured goods were unchanged in December (+0.6% y/y) following a 0.5% monthly gain in November. Shipments of durable goods fell 0.3% m/m, their third monthly decline in the past four months. Shipments excluding transportation edged down 0.1% m/m in December while shipments excluding defense goods fell 0.2% m/m. Shipments of fabricated metal products and of electrical equipment and appliances each rose 0.4% m/m in December while machinery shipments fell 0.8% m/m. Shipments of nondurable goods increased 0.4% m/m in December after having been unchanged in November.

Unfilled orders for durable goods increased 1.3% m/m (+9.5% y/y) in December, the same monthly gain as in November. Excluding transportation, unfilled orders were up 0.2% m/m in December. Manufacturing inventories rose 0.2% m/m in December, their first monthly gain in three months. Inventories of durable goods increased 0.4% while inventories of nondurable goods fell 0.2% m/m, their third consecutive monthly decline.

Manufacturers’ orders and shipments of durable goods, as well as nondurable goods, are compiled by the U.S. Census Bureau; they are available in Haver’s USECON database. Unfilled orders and inventories are also included. The Action Economics forecast data are in the AS1REPNA database.