Global| Feb 27 2017Durable Goods Orders Rise, Reflecting Aircraft Rebound
Summary
Durable goods orders increased by 1.8% in January (-0.6% y/y), following a revised 0.8% decline in December. The January rise was close to the Action Economics forecast survey median of 1.6%. Although the headline orders figure [...]
Durable goods orders increased by 1.8% in January (-0.6% y/y), following a revised 0.8% decline in December. The January rise was close to the Action Economics forecast survey median of 1.6%. Although the headline orders figure jumped, the overall report actually was slightly softer than expected.
The headline rise in orders was more than accounted for by a 6.0% jump in the volatile transportation sector (-6.1% y/y), reflecting a huge bounce in aircraft orders (66.3%). Apart from transportation, orders actually edged down by 0.2% (+2.4% y/y).
Core capital goods orders (which exclude defense and civilian aircraft) edged down by 0.4% (+0.5% y/y) and core capital shipments declined by 0.6% (-0.9% y/y). Orders for computers and electronic products declined by 1.6% (+5.8% y/y) and electrical equipment fell by 2.2% (+0.5% y/y).
Durable goods shipments slipped by 0.1% (+1.5% y/y), and core capital goods shipments declined by 0.6% (-0.9% y/y).
Keep in mind that durable goods figures are erratic and month-to-month variations can be misleading. As a result, it makes sense to look at trends in these series.
Although the January figures were on the soft side, the weakness followed solid gains over the previous six months. For example, even with today's softer report, core capital goods orders and shipments were up 5.3% and 4.0% annualized since the summer.
Also, unfilled orders excluding transportation increased by 0.4% (+2.4% y/y), the seventh consecutive monthly increase. Rising order backlogs suggest that demand for durable goods exceeds production.
Total durable goods inventories remained steady (-0.8% y/y), and increased 0.3% (0.0% y/y) excluding the transportation sector.
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 | Jan | Dec | Nov | Jan Y/Y | 2016 | 2015 | 2014 |
|---|---|---|---|---|---|---|---|
| New Orders (SA, %) | 1.8 | -0.8 | -4.7 | -0.6 | -0.4 | -2.9 | 4.8 |
| Transportation | 6.0 | -4.4 | -14.7 | -6.1 | -0.5 | -4.0 | 6.8 |
| Total Excluding Transportation | -0.2 | 0.9 | 1.1 | 2.4 | -0.4 | -2.3 | 3.8 |
| Nondefense Capital Goods | 3.6 | 3.7 | -19.8 | -6.9 | -5.2 | -9.6 | 1.2 |
| Excluding Aircraft | -0.4 | 1.1 | 1.7 | 0.4 | -3.4 | -3.2 | 0.8 |
| Shipments | -0.1 | 1.6 | 0.4 | 1.5 | -0.8 | 1.1 | 3.6 |
| Unfilled Orders | -0.4 | -0.7 | -0.3 | -1.9 | -1.5 | -2.4 | 8.6 |
| Inventories | 0.0 | -0.1 | 0.2 | -0.8 | -1.1 | -0.6 | 5.2 |
Peter D'Antonio
AuthorMore in Author Profile »Peter started working for Haver Analytics in 2016. He worked for nearly 30 years as an Economist on Wall Street, most recently as the Head of US Economic Forecasting at Citigroup, where he advised the trading and sales businesses in the Capital Markets. He built an extensive Excel system, which he used to forecast all major high-frequency statistics and a longer-term macroeconomic outlook. Peter also advised key clients, including hedge funds, pension funds, asset managers, Fortune 500 corporations, governments, and central banks, on US economic developments and markets. He wrote over 1,000 articles for Citigroup publications. In recent years, Peter shifted his career focus to teaching. He teaches Economics and Business at the Molloy College School of Business in Rockville Centre, NY. He developed Molloy’s Economics Major and Minor and created many of the courses. Peter has written numerous peer-reviewed journal articles that focus on the accuracy and interpretation of economic data. He has also taught at the NYU Stern School of Business. Peter was awarded the New York Forecasters Club Forecast Prize for most accurate economic forecast in 2007, 2018, and 2020. Peter D’Antonio earned his BA in Economics from Princeton University and his MA and PhD from the University of Pennsylvania, where he specialized in Macroeconomics and Finance.
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