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Economy in Brief

U.S. Durable Goods Orders Decline Broadly
by Tom Moeller  January 28, 2016

New orders for durable goods tumbled 5.1% (-0.6% y/y) during December following a -0.5% decline in November, revised from little change in the advance report. A 0.2% decline had been expected in the Action Economics' Forecast Survey. A 3.3% decline in orders during all of last year similarly emphasizes the factory sector's difficulties.

A 12.4% decline (+5.5% y/y) in transportation sector orders led the weakness in the report. Orders from the Defense Department for aircraft stumbled by roughly two-thirds (-38.4% y/y). Nondefense aircraft orders declined 28.4% (+67.9% y/y) and motor vehicle & parts orders eased 0.4% (+4.5% y/y).

Outside of the transportation, orders were similarly weak last month. A 1.2% decline (-3.2% y/y) reflected a 5.6% drop in machinery orders (-6.2% y/y), the fourth decline in five months. Computer & electronic product bookings fell 2.0% (+7.5% y/y). Fabricated metals orders eased 0.5% (-5.3% y/y). To the upside, primary metals orders gained 0.3% (-15.7% y/y) following sharp declines in five of the prior six months. Electrical machinery orders increased 2.1%, but they still were down 7.7% y/y. Nondefense capital goods orders gained 0.5% (-0.1% y/y), though excluding aircraft, orders dropped 4.3% (-7.5% y/y).

Shipments of durable goods declined 2.2% (-2.5% y/y), although excluding transportation they were little changed (-2.7% y/y). Unfilled orders declined 0.5% (-1.9% y/y) and excluding transportation, they also fell 0.5% (-2.2% y/y). Inventories backed up 0.5% (-0.1% y/y), but that followed five straight months of decline.

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

Durable Goods NAICS Classification Dec Nov Oct Dec Y/Y 2015 2014 2013
New Orders (SA, %) -5.1 -0.5 2.8 -0.6 -3.3 6.8 2.2
  Transportation -12.4 -0.5 7.6 5.5 -4.8 6.1 6.5
Total Excluding Transportation -1.2 -0.5 0.5 -3.2 -2.5 7.2 0.1
  Nondefense Capital Goods -15.0 -8.1 12.0 -12.3 -10.3 6.6 2.8
    Excluding Aircraft -4.3 -1.1 0.6 -7.5 -3.8 6.3 -1.0
Shipments -2.2 0.6 -1.2 -2.6 1.5 4.8 2.0
Inventories 0.5 -0.2 -0.3 -0.1 -0.1 6.1 2.4
Unfilled Orders -0.5 0.1 0.3 -1.9 -1.9 11.4 6.4
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