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Economy in Brief

U.S. Durable Goods Orders Fall in August
by Tom Moeller  September 27, 2022

• Aircraft orders lead decline; increases elsewhere are broad-based.

• Nondefense capital goods orders less aircraft rise further.

• Order backlogs & inventories increase again.

Activity in the factory sector remains firm, despite a 0.2% decline (+8.8% y/y) in new orders for durable goods last month, which wholly reflected a decline in civilian aircraft bookings. It followed a 0.1% July slip which was revised from little change. June orders surged 2.3%. The decline in durable goods orders last month matched expectations in the Action Economics Forecast Survey.

Business investment firmed last month. New orders for nondefense capital goods excluding aircraft surged 1.3% (8.8% y/y) In August after a 0.7% July gain. It was the largest monthly increase since January.

A 1.1% decline (+14.6% y/y) in transportation equipment orders held back the overall change in August orders. It followed a 0.7% fall in July. Motor vehicle & parts orders rose 0.3% (14.2% y/y) during August after holding steady in July. Orders for defense aircraft rebounded 31.2% (41.2% y/y) after falling 45.6%.

Excluding transportation, durable goods orders rose 0.2% during August (6.1% y/y), the same as in July. Electrical equipment & appliance orders rebounded 1.0% (8.1% y/y) after falling 0.6%. Computer & electronic product orders rose 0.8% (6.4% y/y) in August after strengthening 1.5% in July. Machinery orders gained 0.3% (7.4% y/y) after rising 0.5% in each of the prior two months. Primary metals orders rose 0.4% (6.8% y/y) after falling 1.5% in July but fabricated metals orders fell 0.7% (+3.7% y/y) and reversed the July gain.

Shipments of durable goods improved 0.7% (10.8% y/y) last month after two roughly 0.2% gains. Transportation shipments rose 1.9% (16.4% y/y) after rising 1.2% in July. Excluding transportation, shipments rose 0.2% (8.3% y/y) following the 0.3% July decline.

The advance reading of shipments of nondurable goods indicated a rise of 0.1% (+13.5% y/y) last month after falling 1.9% in July. Shipments from all manufacturing industries improved 0.4% (12.1% y/y), after weakening 0.9% in July. Capital goods shipments excluding defense and aircraft rose 0.3% (11.0% y/y) in August after rising 0.6% in July.

Unfilled orders for durable goods gained 0.5% (6.9% y/y) last month after improving 0.7% in July. Unfilled orders are not calculated for nondurable goods.

Durable goods inventories edged up 0.2% (8.0% y/y) in August, the same as in July. Nondurable goods inventories declined 0.7% (+10.1% y/y) after a 0.4% July drop.

The durable goods and nondurable goods data are available in Haver's USECON database. The Action Economics consensus forecast figure is in the AS1REPNA database.

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