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Economy in Brief

U.S. Durable Goods Orders' Strength Led by Civilian Aircraft; Capital Spending Weakens
by Tom Moeller  May 26, 2016

New orders for durable goods jumped 3.4% during April (1.9% y/y) following a 1.9% March increase, revised from 0.8%. A 0.2% April gain had been expected in the Action Economics Forecast Survey. Data were revised back to 2001.

A 64.9% rise (5.1% y/y) in orders for civilian aircraft drove total transportation sector orders 8.9% higher (8.2% y/y). Orders for defense aircraft & parts declined 4.5% (+29.8% y/y) and motor vehicle & parts orders gained 2.9% (4.1% y/y). Excluding the transportation sector altogether, total durable goods orders improved 0.4% (-1.4% y/y) after a 0.1% rise.

Business investment remained soft. Nondefense capital goods orders excluding civilian aircraft eased 0.8% (-5.0% y/y), down for the fifth month in the last six.

A 1.9% decline (-7.1% y/y) in machinery orders exemplified the weakness in capital spending. It was the third consecutive monthly decline. To the upside, orders for electrical equipment, appliances & components improved 0.5% (-8.6% y/y) following three consecutive months of decline, and computer & electronic products orders gained 1.9% (+4.0% y/y). Primary metals orders remained roughly unchanged (-9.2% y/y).

Shipments of durable goods improved 0.6% (-1.2% y/y) after easing 0.8% for two straight months. Shipments excluding transportation gained 0.3% (-1.9% y/y). Unfilled orders for durable goods rose 0.6% (-1.7% y/y), and excluding transportation they rose 0.1% for the third straight month (-0.4% y/y). Inventories declined 0.2% (-2.3% y/y), and they've been falling since June.

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 Apr Mar Feb Apr Y/Y 2015 2014 2013
New Orders (SA, %) 3.4 1.9 -3.3 1.9 -2.9 4.8 2.8
  Transportation 8.9 5.3 -6.7 8.2 -4.0 6.8 8.8
Total Excluding Transportation 0.4 0.1 -1.5 -1.4 -2.3 3.8 -0.1
  Nondefense Capital Goods 7.8 -0.1 -7.9 -4.5 -9.6 1.2 4.2
    Excluding Aircraft -0.8 -0.1 -2.1 -5.0 -3.2 0.8 0.4
Shipments 0.6 -0.8 -0.8 -1.2 1.1 3.5 2.8
Inventories -0.2 -0.2 -0.3 -2.3 -0.6 5.2 1.0
Unfilled Orders 0.6 0.0 -0.5 -1.7 -2.4 8.6 5.7
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