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Economy in Brief

U.S. Durable Goods Orders Rebound; Capital Goods Surge
by Tom Moeller  February 25, 2016

Factory sector activity is gaining strength. New orders for durable goods recovered 4.9% during January (1.8% y/y) following a 4.6% December decline, revised from -5.1%. A 2.4% increase had been expected in the Action Economics Forecast Survey.

An 11.5% surge (6.7% y/y) in transportation sector orders led the recovery, as it made up a 12.1% decline. Nondefense aircraft orders surged by 54.2% (5.2% y/y) following sharp declines in the prior two months. Defense aircraft orders also jumped 84.8% (22 .6% y/y) and motor vehicle orders gained 3.0% (10.7% y/y). Outside of the transportation sector, orders advanced 1.8% (-0.6% y/y) and made up declines in the prior two months.

Machinery orders jumped 6.9% (0.4% y/y) and recouped losses during November & December. Orders for electrical equipment increased 1.1% (-0.7% y/y), strong for the third straight month. Computer & electronic product orders gained 0.8% (7.0% y/y) after a 1.9% decline. Computer & related product orders jumped 6.4%, but they were down 8.9% y/y. Communications equipment bookings recovered 9.6% (-4.1% y/y) following a 17.4% drop. Fabricated metals orders increased 1.6% (-0.2% y/y) and primary metal orders gained 0.7% (-14.4% y/y).

Shipments of durable goods increased 1.9% (0.9% y/y) following a 1.6% drop. Outside of transportation, shipments edged 0.2% higher, but were down 0.9% y/y. Unfilled orders ticked 0.1% higher (-1.8% y/y) following a 0.5% fall. Outside of transportation backlogs rose 0.2% (-2.0% y/y). Durable goods inventories eased 0.1% (-0.8% y/y). Outside of transportation, inventories dropped 0.4% (-2.4% y/y), and they've been declining steadily since May.

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 Jan Dec Nov Jan Y/Y 2015 2014 2013
New Orders (SA, %) 4.9 -4.6 -0.5 1.8 -3.3 6.8 2.2
  Transportation 11.5 -12.1 -0.5 6.7 -4.8 6.1 6.5
Total Excluding Transportation 1.8 -0.7 -0.5 -0.6 -2.5 7.2 0.1
  Nondefense Capital Goods 21.6 -14.1 -7.9 -1.5 -10.2 6.6 2.8
    Excluding Aircraft 3.9 -3.7 -0.9 -2.8 -3.7 6.3 -1.0
Shipments 1.9 -1.6 0.6 0.9 1.6 4.8 2.0
Inventories -0.1 0.2 -0.3 -0.8 -0.4 6.1 2.4
Unfilled Orders 0.1 -0.5 0.1 -1.8 -1.9 11.4 6.4
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