Surge in Nondefense Aircraft Orders Push Up U.S. Durable Goods Orders in December
by:Sandy Batten
|in:Economy in Brief
Summary
- Total orders jumped 5.6% m/m but fell 0.1% m/m when subtracting nondefense aircraft.
- Nondefense aircraft soared 115% m/m.
- Both core capital goods orders and shipments fell.
New durable goods orders jumped up 5.6% m/m (11.9% y/y) in December following an upwardly revised 1.7% m/m decline in November (previously -2.1%). The Action Economics Forecast Survey had looked for a 2.8% monthly increase in December. The outsized December increase was due completely to a 115% m/m surge in nondefense aircraft orders. Subtracting those, the remainder of orders slipped 0.1% m/m. Total transportation orders (aircraft and motor vehicles) were up 16.7% m/m (32.8% y/y). Total orders excluding all of transportation fell 0.1% m/m (+2.1% y/y) in December, the first decline in three months.
Orders performance varied across major sectors. The largest monthly decline was machinery orders which fell 1.7% m/m, their third monthly decline in the past four months. Orders for primary metals and for computers/electronic equipment also declined in December. Apart from the surge in transportation orders, orders for electrical equipment and appliances rose a solid 1.9% m/m in December on top of a 0.6% monthly gain in November. Orders for defense goods fell 3.4% m/m, their first decline in three months. Core capital goods orders (orders for nondefense capital goods excluding aircraft) fell 0.2% m/m in December after a downwardly revised unchanged reading in November (previously +0.1% m/m).
Shipments of durable goods rose 0.5% m/m (8.5% y/y) in December following a 0.4% monthly gain in November. Shipments of nondurable goods slumped 1.7% m/m (+5.6% y/y) on top of a 2.0% m/m decline in November. Total manufacturing shipments declined 0.6% m/m (+7.1% y/y) after a 0.8% m/m drop in November. Transportation shipments increased 1.7% m/m (18.1% y/y) in December. Excluding those, the remainder of shipments of durable goods slipped 0.1% m/m. Shipments of defense goods rose 3.5% m/m in December. When these are excluded, the remainder increased 0.3% m/m. Core capital goods shipments, a reliable coincident indicator of business spending on equipment, fell 0.4% m/m following a downwardly revised 0.2% monthly decline in November (previously -0.1%). Clearly, the momentum of business spending on equipment faded during the fourth quarter of 2022.
Unfilled durable goods orders rose 1.3% m/m in December, their largest monthly increase since July 2014, due mostly to a 2.8% monthly increase in unfilled aircraft orders. Manufacturing inventories increased 0.4% m/m in December after having been unchanged in November. Durable goods inventories rose 0.7% m/m while nondurable goods inventories slipped 0.1% m/m in December.
Manufacturers’ orders and shipments of durable goods, as well as nondurable goods, are available in Haver’s USECON database. Unfilled orders and inventories are also included. The Action Economics forecast data are in the AS1REPNA database.
Sandy Batten
AuthorMore in Author Profile »Sandy Batten has more than 30 years of experience analyzing industrial economies and financial markets and a wide range of experience across the financial services sector, government, and academia. Before joining Haver Analytics, Sandy was a Vice President and Senior Economist at Citibank; Senior Credit Market Analyst at CDC Investment Management, Managing Director at Bear Stearns, and Executive Director at JPMorgan. In 2008, Sandy was named the most accurate US forecaster by the National Association for Business Economics. He is a member of the New York Forecasters Club, NABE, and the American Economic Association. Prior to his time in the financial services sector, Sandy was a Research Officer at the Federal Reserve Bank of St. Louis, Senior Staff Economist on the President’s Council of Economic Advisors, Deputy Assistant Secretary for Economic Policy at the US Treasury, and Economist at the International Monetary Fund. Sandy has taught economics at St. Louis University, Denison University, and Muskingun College. He has published numerous peer-reviewed articles in a wide range of academic publications. He has a B.A. in economics from the University of Richmond and a M.A. and Ph.D. in economics from The Ohio State University.
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