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Durable Goods Orders: Rebound but not enough to turn trend

August 25, 2016
Bottom Line: Durable goods orders rebounded more than expected in July as aircraft orders jumped. Boeing saw orders rise from 12 in June to 73 in July. While core components rose, this was not enough to turn an anemic trend of late. Durable goods orders have fallen at a 11.1% annualized rate in the last three months. Looking at the past 12 months, hardgood orders have declined at a 3.3% annualized rate.

Durable Goods Orders ROSE by 4.4% in July, compared with market expectations for an increase of 3.4%. Moreover, the prior month was revised higher from -3.9%to -4.2%.

Transportation Orders ROSE by 10.5% with civilian aircraft orders climbing by 89.9% while motor vehicle orders were unchanged by 0.0%. Ex-transportation orders ROSE by 1.5%. Computers and electronic products, electrical equipment increased while all other durable goods declined.

Core Durable Goods Orders, those excluding both civilian aircraft and defense, ROSE by 1.0% and are 1.6% BELOW their year ago level.

Nondefense Capital Goods Shipments ROSE. Including civilian aircraft, they ROSE just fractionally and excluding them they FELL by 0.4%

Durable manufacturing inventories ROSE by 0.3%.

The July level of nondefense capital goods shipments ex-aircraft, proxies for equipment and software investment, is modestly below its Q2 level, suggesting that capital spending will have a negative Q3 impact on GDP growth.
Article by contingentmacro