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Economy in Brief

U.S. Durable Goods Orders Decline as Aircraft Orders Fall
by Tom Moeller  November 22, 2017

Activity in the factory sector weakened last month. New orders for durable goods declined 1.2% during October (+1.0% y/y) following an unrevised 2.2% September increase. A 0.5% increase in orders had been expected in the Action Economics Forecast Survey.

The decline in orders reflected a 4.3% fall (-10.1% y/y) in transportation sector bookings which reversed a 4.4% increase. Nondefense aircraft & parts orders weakened 18.6% (-48.9% y/y), but motor vehicle & parts orders gained 1.7% (4.8% y/y). Excluding the transportation sector durable goods orders improved 0.4% (7.4% y/y), up at a 9.8% annual rate during the last three months.

Nondefense capital goods orders weakened 4.5% (-7.5% y/y) due to the decline in civilian aircraft orders. Orders excluding aircraft slipped 0.5% (+8.1% y/y) following three consecutive months of strong increase.

Electrical equipment bookings rose 0.8% (0.8% y/y) following three straight months of even stronger gain. Machinery orders improved 0.6% (9.3% y/y), about as they did in September. Orders for computers & electronic products increased 0.4% (8.3% y/y), also following three months of strong increase. Primary metals orders jumped 1.3% (11.6% y/y) after a 0.5% slip, but orders for fabricated metals fell 0.9% (+8.7% y/y) following a 1.8% jump.

Shipments of durable goods ticked 0.1% higher (5.1% y/y) last month after a 1.0% rise. Shipments outside of the transportation sector rose 0.4% (6.7% y/y) after two months of strong increase. Unfilled orders for durable goods were little-changed (0.5% y/y) for the second month in the last three. Backlogs outside of the transportation sector rose 0.4% (4.6% y/y) for the third consecutive month. Durable goods inventories inched up 0.1% (3.6% y/y) following four months of strong gain. Outside of transportation, inventories rose 0.2% (5.3% y/y) after a 0.5% rise.

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

The minutes to the latest FOMC meeting can be found here.

Durable Goods NAICS Classification Oct Sep Aug Oct Y/Y 2016 2015 2014
New Orders (SA, %) -1.2 2.2 2.1 1.0 -1.7 -4.6 4.7
  Transportation -4.3 4.4 4.7 -10.1 -3.4 -6.2 8.2
Total Excluding Transportation 0.4 1.1 0.8 7.4 -0.7 -3.6 2.9
  Nondefense Capital Goods -4.5 7.2 4.0 -7.5 -7.1 -11.0 0.9
    Excluding Aircraft -0.5 2.1 1.4 8.1 -4.6 -4.3 0.3
Shipments 0.1 1.0 0.7 5.1 -1.6 -0.6 3.8
Unfilled Orders -0.0 0.2 -0.0 0.5 -1.7 -2.0 8.3
Inventories 0.1 0.6 0.5 3.6 -0.7 1.6 4.7
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