Durable Goods Orders: New Orders Unchanged

December 23, 2015
Durable Goods Orders were unchanged in November, compared with market expectations for a decline of 0.6%. Moreover, the prior month was revised slightly lower from 3.0%to 2.9%. With this, hardgood orders are now 1.2% ABOVE their year ago level. On a year-over-year basis, durable goods orders has been on a slowing trend since February, amid substantial volatility. Transportation Orders ROSE by 0.4% with civilian aircraft orders dropping by 22.2% while motor vehicle orders climbed by 1.5%. Ex-transportation orders FELL by 0.1%. Electrical equipment, fabricated metal products, all other durable goods, computers and electronic products increased while primary metals and machinery declined. Core Durable Goods Orders, those excluding both civilian aircraft and defense, ROSE by 0.3% but are now 0.3% BELOW their year ago level. Core durable goods orders growth has been slowing since April 2010. Nondefense Capital Goods Shipments were MIXED. Including civilian aircraft, they ROSE by 2.3% and excluding them they FELL by 0.5% Durable manufacturing inventories FELL by 0.3%. Bottom Line: Durable goods orders were unchanged in November, better than expectations for a small decline. Although they have climbed at a 8.5% annualized rate in the last three months, this reflects sharp swings in aircraft orders. Looking at the past 12 months, hardgood orders have increased at a 1.2% annualized rate. The October and November average of nondefense capital goods shipments ex-aircraft, proxies for equipment and software investment, is modestly below its Q3 level, suggesting that capital spending will likely have a negative Q4 impact on GDP growth.
Article by contingentmacro