Durable Goods Orders FELL by 1.0% in January, compared with market expectations for a decline of 1.7%. Moreover, the prior months decline was revised higher from -4.2%to -5.3%. With this, hardgood orders are now 4.6% ABOVE their year ago level. Nevertheless, on a year-over-year basis, durable goods order have been on a slowing trend since April 2010, amid substantial volatility,
Transportation Orders FELL by 5.6% with civilian aircraft orders dropping by 20.2% while motor vehicle orders fell by 2.2%. Ex-transportation orders ROSE by 1.1%. Fabricated metal products, and computers and electronic products increased while primary metals, electrical equipment, all other durable goods, and machinery declined.
Core Durable Goods Orders, those excluding both civilian aircraft and defense, FELL by 0.3% and are now 2.2% ABOVE their year ago level. Core durable goods orders growth has been slowing since April 2010.
Nondefense Capital Goods Shipments FELL. Including civilian aircraft, they FELL by 1.0% and excluding them they FELL by 0.8%
Durable manufacturing inventories ROSE by 0.3%.
Bottom Line: Durable goods orders fell in January. Although they have fallen at a 13.9% annualized rate in the last three months, this reflects sharp swings in aircraft orders, evidenced by 38 aircraft orders in this report compared to 319 in December. Looking at the past 12 months, hardgood orders have increased at a 4.6% rate. Nondefense capital goods shipments ex-aircraft, proxies for equipment and software investment for January, is slightly above its Q4 level, suggesting that capital spending will likely make a small positive contribution to Q1 GDP growth.