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Economy in Brief

U.S. Durable Goods Orders Are Strengthened by Aircraft Bookings
by Tom Moeller  October 25, 2017

New orders for durable goods increased 2.2% during September (8.3% y/y) following an unrevised 2.0% August gain. A 1.2% increase in orders had been expected in the Action Economics Forecast Survey.

The rise in orders reflected a 5.1% increase (10.0% y/y) in transportation sector bookings following a 4.7% gain. Nondefense aircraft & parts orders strengthened by roughly one-third for the second straight month and motor vehicle & parts orders were little changed (2.3% y/y). Excluding the transportation sector, durable goods orders improved 0.7% (7.5% y/y), about as they did during the prior two months. During the last three months, these orders have risen at a 9.4% annual rate, the quickest growth rate since January.

Nondefense capital goods orders strengthened 6.1% (14.6% y/y) due to the increase in civilian aircraft orders. Orders excluding aircraft rose 1.3% (7.8% y/y) for the third consecutive month.

Machinery orders eased 0.2% (+7.0% y/y) about as they did in August. Electrical equipment bookings slipped 0.1% (-1.9% y/y) after a 1.7% jump. Remaining strong were orders for computers & electronic products which jumped 1.6% (6.7% y/y), the third straight month of firm increase. That strength has been powered by communication equipment orders which rose 4.8% in September and by roughly fifty percent (AR) during the last three months. Orders for computers & related products declined 5.5% (+7.9% y/y) last month, off for the second straight month. Primary metals orders slipped 0.1% (+12.5% y/y) after a 1.4% rise, but orders for fabricated metals strengthened 1.7% (13.8% y/y) following a 0.3% gain.

Shipments of durable goods increased 1.0% (5.0% y/y) last month after a 0.7% rise. Shipments outside of the transportation sector rose 0.8% (6.7% y/y) after a 1.2% increase. Unfilled orders for durable goods gained 0.2% (1.4% y/y) following two months of slight decline. Backlogs outside of the transportation sector rose 0.3% (4.3% y/y) after a 0.4% rise. Durable goods inventories gained 0.6% (3.3% y/y), the largest monthly increase in just over two years. Outside of transportation, inventories rose 0.6% (5.0% y/y) the same as in August.

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 Sep Aug Jul Sep Y/Y 2016 2015 2014
New Orders (SA, %) 2.2 2.0 -6.8 8.3 -1.7 -4.6 4.7
  Transportation 5.1 4.7 -19.6 10.0 -3.4 -6.2 8.2
Total Excluding Transportation 0.7 0.7 0.8 7.5 -0.7 -3.6 2.9
  Nondefense Capital Goods 6.1 4.0 -19.7 14.6 -7.1 -11.0 0.9
    Excluding Aircraft 1.3 1.3 1.3 7.8 -4.6 -4.3 0.3
Shipments 1.0 0.7 0.1 5.0 -1.6 -0.6 3.8
Unfilled Orders 0.2 -0.0 -0.3 1.4 -1.7 -2.0 8.3
Inventories 0.6 0.5 0.5 3.3 -0.7 1.6 4.7
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