Global| Nov 29 2005U.S. Durable Goods Rebound; Aircraft Orders Soared
by:Tom Moeller
|in:Economy in Brief
Summary
Orders for nondefense aircraft soared 50.4% m/m (100.6% y/y) in October. That combined with a more than doubling (111.1% y/y) of defense aircraft bookings, caused total durable goods orders to jump 3.4% last month and therefore [...]
Orders for nondefense aircraft soared 50.4% m/m (100.6% y/y) in October. That combined with a more than doubling (111.1% y/y) of defense aircraft bookings, caused total durable goods orders to jump 3.4% last month and therefore recovered all of the little revised 2.0% decline in September. Consensus expectations had been for a 1.5% rise in October orders.
Less the volatile transportation sector altogether, durable goods orders rose 0.3% after a 0.2% slip in September which was shallower than the decline initially reported.
Orders for nondefense capital goods recovered about two thirds of the prior month's drop with a 6.7% spike. Less aircraft these orders rose 1.3% following a 1.7% September decline that was deeper than initially estimated. 
Falling orders for computers & electronic products have been a drag on the capital goods total of late. They fell 1.3% (+5.7% y/y) in October for the third hard decline in the last four months. Computer orders fell 1.7% m/m though the y/y gain of 11.0% was respectable due to a sharp 13.5% jump back in August. Orders for electrical equipment orders also have been erratic, but the trend is up. Despite a 3.5% decline in October (+12.3% y/y) the three month average level rose to its highest since early 2001. Machinery orders, in contrast, have been consistently strong. A 2.1% (8.5% y/y) rise in October pulled the three month average of machinery orders to a record high.
Shipments of durable goods rose 1.4% (6.9% y/y) in October due to broad based industry gains. Less the transportation sector, shipments rose 1.2% (7.5% y/y) with the standout being a 10.0% y/y gain in electrical equipment.
Order backlogs rose a strong 1.5% (12.0% y/y) driven partially by a 2.0% (14.4% y/y) rise in transportation. Less transportation backlogs still were firm for the third straight month, though the ratio of backlogs to shipments did slip slightly from its recent high.
Durable inventories increased 0.4% (4.6% y/y) following an upwardly revised 0.1% Rise in September. The I/S ratio for durable goods fell to its lowest since April of last year.
| NAICS Classification | Oct | Sept | Y/Y | 2004 | 2003 | 2002 |
|---|---|---|---|---|---|---|
| Durable Goods Orders | 3.4% | -2.0% | 11.4% | 9.5% | 4.1% | -3.4% |
| Excluding Transportation | 0.3% | -0.2% | 8.7% | 11.7% | 3.1% | -6.2% |
| Nondefense Capital Goods | 6.7% | -8.6% | 19.4% | 11.0% | 4.2% | -9.8% |
| Excluding Aircraft | 1.3% | -1.7% | 10.7% | 9.5% | 4.8% | -10.5% |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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