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Economy in Brief

U.S. Durable Goods Orders Decline Is Led by Aircraft
by Tom Moeller  July 27, 2016

New orders for durable goods fell 4.0% during June (-6.4% y/y) following a 2.8% May decline, revised from -2.2%. A 1.0% shortfall had been expected in the Action Economics Forecast Survey.

For a second straight month, weakness in the transportation sector led total orders lower. A 10.5% decline (-11.6% y/y) followed a 7.1% drop. Orders for civilian aircraft & parts plunged 58.8%, off by more than one half y/y, following a 5.5% decline. Defense aircraft orders were off 7.4% (-28.9% y/y) following a 9.0% drop. Working the other way, motor vehicle & parts orders improved 2.6% (2.5% y/y) after a 3.1% decline.

Outside of the transportation sector altogether, orders for durable goods eased 0.5% (-3.6% y/y) following a 0.4% decline. Primary metal orders declined 1.3% (-10.5% y/y), the same as they did in May. Fabricated metal orders eased 0.3% (-0.6% y/y). Machinery bookings slipped 0.1% (-7.2% y/y), but electrical equipment orders improved 0.8% (-5.7% y/y). Orders for computers & electronic products declined 2.2% (+0.3% y/y) as computer & related products orders fell 9.1% (-28.0% y/y). Orders for communications equipment were off 2.3% (-2.9% y/y).

Orders for nondefense capital goods fell 11.3% (-15.7% y/y) following a 1.6% decline. Excluding aircraft, nondefense capital goods orders improved 0.2% (-3.7% y/y following two consecutive monthly declines.

Shipments of durable goods rose 0.4% (-2.0% y/y), but excluding transportation they were off 0.2% (-3.2 % y/y) for second straight month. Unfilled durable goods orders declined 0.9% (-1.9% y/y) and excluding transportation they eased 0.2% (-0.3% y/y), following two months of stability. Inventories of durable goods declined 0.2% (-3.5% y/y), while outside of the transportation sector inventories gained 0.2% (-4.1% y/y), the first rise in a year.

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 Jun May Apr Jun Y/Y 2015 2014 2013
New Orders (SA, %) -4.0 -2.8 3.2 -6.4 -2.9 4.8 2.8
  Transportation -10.5 -7.1 8.5 -11.6 -4.0 6.8 8.8
Total Excluding Transportation -0.5 -0.4 0.3 -3.6 -2.3 3.8 -0.1
  Nondefense Capital Goods -11.3 -1.6 8.3 -15.7 -9.6 1.2 4.2
    Excluding Aircraft 0.2 -0.5 -0.9 -3.7 -3.2 0.8 0.4
Shipments 0.4 -0.3 0.4 -2.0 1.1 3.5 2.8
Unfilled Orders -0.9 0.0 0.6 -1.9 -2.4 8.6 5.7
Inventories -0.2 -0.4 -0.4 -3.5 -0.6 5.2 1.0
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