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Economy in Brief

U.S. Durable Goods Orders Decline Paced by Military Aircraft
by Tom Moeller  June 24, 2016

New orders for durable goods declined 2.2% during May (+3.2% y/y) following a 3.3% April increase, revised from 3.4%. A 0.8% decline had been expected in the Action Economics Forecast Survey.

Weakness in the transportation sector led total orders lower with a 5.6% drop (+10.5% y/y) following an 8.5% rise. Defense aircraft orders plunged 34.1% (-9.6% y/y) following a 9.0% decline. Adding to this decline, motor vehicle & parts orders fell 2.8% (+0.7% y/y) after a 1.8% rise. Orders for civilian aircraft & parts rose 1.0% (73.2% y/y) and built on a 69.4% surge.

Outside of the transportation sector altogether, orders for durable goods eased 0.3% (-0.4% y/y) following a 0.5% gain. Primary metal orders declined 1.4% (-8.3% y/y) and fabricated metal orders eased 0.3% (+3.0% y/y). Machinery bookings fell 0.2% (-5.6% y/y) and electrical equipment orders were off 0.1% (-5.5% y/y). Orders for computers & electronic products also eased 0.1% (+3.1% y/y) as computer & related products orders fell 2.5% (-12.1% y/y). To the upside, orders for communications equipment increased 4.7% (1.5% y/y).

Orders for nondefense capital goods eased 0.8% (+4.9% y/y) following an 8.7% rise. Excluding aircraft, nondefense capital goods orders fell 0.7% (-3.6% y/y, the third monthly decline this year.

Shipments of durable goods eased 0.2% (-1.1% y/y) and excluding aircraft they were off 0.1% (-1.5% y/y). Unfilled durable goods orders increased 0.2% (-0.9% y/y) and excluding transportation they were unchanged, both m/m and y/y. Inventories of durable goods declined 0.3% (-2.5% y/y), while outside of the transportation sector inventories eased 0.2% (-3.7% y/y).

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

Macroeconomic Sources of Recent Interest Rate Fluctuations from the Federal Reserve Bank of Chicago is available here.

Durable Goods NAICS Classification May Apr Mar May Y/Y 2015 2014 2013
New Orders (SA, %) -2.2 3.3 2.0 3.2 -2.9 4.8 2.8
  Transportation -5.6 8.5 5.3 10.5 -4.0 6.8 8.8
Total Excluding Transportation -0.3 0.5 0.3 -0.4 -2.3 3.8 -0.1
  Nondefense Capital Goods -0.8 8.7 0.3 4.9 -9.6 1.2 4.2
    Excluding Aircraft -0.7 -0.4 0.3 -3.6 -3.2 0.8 0.4
Shipments -0.2 0.4 -0.7 -1.1 1.1 3.5 2.8
Inventories -0.3 -0.4 -0.2 -2.5 -0.6 5.2 1.0
Unfilled Orders 0.2 0.6 0.0 -0.9 -2.4 8.6 5.7
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