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Economy in Brief

U.S. Durable Goods Orders Surge Due To Aircraft
by Tom Moeller  February 24, 2011

Volatility is the keyword for recent bookings in most categories of the durable goods factory sector, but the trend remains positive. Stronger orders for aircraft & parts were behind the advance report of a 2.7% jump in January durable goods orders. The gain followed a 0.4% December decline that was previously reported at down 2.3%. Excluding the transportation sector altogether, orders fell 3.6% after a 3.0% December increase. The overall volatility of orders owed to a recovery in commercial aircraft bookings following a December evaporation. Also, motor vehicle orders ticked up 0.4% (-0.9% y/y) after a 2.6% December gain. Outside of the volatility in transportation, durable goods orders slumped 3.6% following a 3.0% December gain that was initially reported as 0.5%.

Orders in most other categories were quite volatile during the last two months. Machinery orders fell 13.0% (+25.4% y/y) after a 16.6% December gain. Orders for computers & electronic products fell 6.8% (+2.8% y/y) following a December uptick. Electrical equipment orders slumped 4.9% (+10.3% y/y) after a similarly small December rise. Orders for nondefense capital goods greatly reflected the volatility in aircraft with a 4.6% gain, but excluding aircraft they fell 6.9% after a 4.3% December jump.

Shipments of durable goods again were more stable than orders. They continued to trend higher and increased 0.3% (5.6% y/y) after a 2.3% December gain. Less transportation, shipments rose 0.5% (9.9% y/y) after a 2.0% December gain. Despite these gains, there was a 5.8% decline (+15.4% y/y) in machinery after 7.5% December jump. Behind the improving trend in factor sector activity was continuing accumulation of inventories. A 0.7% January gain was much like those during all of last year when inventories rose 9.3%. Unfilled orders also moved higher last month by 0.5% (4.4% y/y).

The durable goods figures are available in Haver's USECON database.

NAICS Classification (%) Jan Dec Nov Y/Y 2010 2009 2008
Durable Goods Orders 2.7 -0.4 -0.1 7.0 13.7 -20.7 -9.0
  Excluding Transportation -3.6 3.0 4.6 10.9 13.8 -18.4 -2.5
Nondefense Capital Goods 4.6 -3.4 -7.9 11.3 21.9 -26.8 -12.6
  Excluding Aircraft -6.9 4.3 3.3 14.1 16.9 -19.8 -4.2
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