U.S. Durable Goods Orders Boosted by Transportation in September
by:Sandy Batten
|in:Economy in Brief
Summary
- Orders rose 0.4% m/m but fell 0.5% m/m when transportation excluded.
- Orders have increased only 0.4% over the past three months.
- Both core capital goods shipments and orders fell in September with downward revisions to August.
Activity in the factory sector appears to be plateauing. New orders for durable goods increased 0.4% m/m (11.3% y/y) in September but this increase was more than accounted for by a 2.1% m/m increase in transportation orders. Excluding these, the remainder of durable goods orders fell 0.5% m/m (+5.1% y/y) after having been unchanged in August (revised down from a 0.3% monthly gain). Over the past three months, total orders have risen just 0.4% and excluding transportation, they have fallen 0.4%. The Action Economics Forecast Survey had looked for a 0.5% m/m increase in total orders in September.
The boost from transportation orders in September reflected a 2.2% m/m (21.8% y/y) increase in motor vehicles and parts orders and a 5.3% m/m (34.7% y/y) rebound in aircraft orders. The rise in aircraft orders was due to a 21.9% surge in nondefense aircraft orders following an 8.6% monthly decline in August. Defense aircraft orders slumped 32.2% m/m in September after an outsized 26.1% m/m jump in August. Apart from transportation orders, orders in all other major categories declined in September, led by a 3.2% m/m fall in communications equipment orders, a 1.7% monthly drop in primary metals orders and a 1.3% m/m decline in electrical equipment & appliances orders.
Business spending on equipment also sputtered in September. New orders for nondefense capital goods excluding aircraft fell 0.7% m/m (+7.9% y/y) in September after a downwardly revised 0.8% monthly gain in August (initially reported as +1.4%). This was the first monthly decline in seven months. An accurate coincident indicator of business spending on equipment is shipments of nondefense capital goods excluding aircraft. These also fell in September, down 0.5% m/m with a downward revision to August (0.2% versus the initially reported 0.4%). This was the first monthly decline in core capital goods shipments since February 2021.
Total manufacturing shipments edged up 0.2% m/m (11.8% y/y) in September following a 0.7% monthly increase in August. Shipments of durable goods rose 0.3% m/m while shipments of nondurable goods increased 0.2% m/m. Durable goods shipments excluding transportation fell 0.2% m/m as shipments of transportation equipment rose 1.1% m/m. As for durable goods orders, durable goods shipments apart from transportation generally declined.
Unfilled orders for durable goods gained 0.5% (6.9% y/y) last month, the same monthly increase as in August. Unfilled orders are not calculated for nondurable goods.
Durable goods inventories edged up 0.2% (7.1% y/y) in September following an upwardly revised 0.3% monthly increase in August. Nondurable goods inventories were essentially unchanged in September from August (+8.8% y/y) after a 0.7% m/m drop in August.
The durable goods and nondurable goods data are available in Haver's USECON database. The Action Economics consensus forecast figure is 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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