Durable Goods Orders: New Orders Increase Moderately
May 26, 2016
Bottom Line: Durable goods orders rose in April. Although they have climbed at a 7.4% 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 1.9% annualized rate. The April level of nondefense capital goods shipments ex-aircraft, proxies for equipment and software investment, is still modestly below its Q1 level, suggesting that capital spending will likely have a negative Q2 impact on GDP growth. Durable Goods Orders ROSE by 3.4% in April, compared with market expectations for an increase of 0.5%. Moreover, the prior month was revised higher from 0.8%to 1.9%. With this, hardgood orders are now 1.9% ABOVE their year ago level. On a year-over-year basis, durable goods orders are now increasing modestly after a declining trend over the past year, amid substantial volatility. Transportation Orders ROSE by 8.9% with civilian aircraft orders climbing by 64.9% while motor vehicle orders climbed by 2.9%. Ex-transportation orders ROSE by 0.4%. Fabricated metal products, computers and electronic products and electrical equipment increased while machinery and all other durable goods declined. Core Durable Goods Orders, those excluding both civilian aircraft and defense, ROSE by 0.6% but are still 0.4% BELOW their year ago level. Core durable goods orders growth has been declining slightly since mid-2015. Nondefense Capital Goods Shipments ROSE. Including civilian aircraft, they ROSE by 0.6% and excluding them they ROSE by 0.3% Durable manufacturing inventories FELL by 0.2%.
Article by contingentmacro