The headlines say the durable goods new orders declined. However, the unadjusted three month rolling average improved.
Analyst Opinion of the Durable Goods Situation
Our analysis is more postitive than the headlines as we see improvement this month. Civilian aircraft were the main headwind this month. If one removes aircraft – this is a stronger report. This series has wide swings monthly so our primary metric is the unadjusted three month rolling average which improved.
Econintersect Analysis:
unadjusted new orders growth decelerated 10.3 % (after accelerating a revised 9.0 % the previous month) month-over-month , and is up 4.6 % year-over-year.
the three month rolling average for unadjusted new orders accelerated 1.5 % month-over-month, and up 8.5 % year-over-year.
Year-over-Year Change of 3 Month Rolling Average – Unadjusted (blue line) and Inflation Adjusted (red line)
z durable1.png
Inflation adjusted but otherwise unadjusted new orders are up 3.6 % year-over-year.
Backlog (unfilled orders) accelerated 0.6 % month-over-month, and is up 0.4 % year-over-year.
The Federal Reserve’s Durable Goods Industrial Production Index (seasonally adjusted) growth down 0.5 % month-over-month, up 0.4 % year-over-year [note that this is a series with moderate backward revision – and it uses production as a pulse point (not new orders or shipments)] – three month trend is accelerating.
Comparing Seasonally Adjusted Durable Goods Shipments (blue line) to Industrial Production Durable Goods (red line)
note this is labelled as an advance report – however, backward revisions historically are relatively slight.
Census Headlines:
new orders declined 6.8 % month-over-month.
backlog (unfilled orders) decreased 0.3 % month-over-month.
the market expected (from Bloomberg):
| |
Consensus Range |
Consensus |
Actual |
| New Orders – M/M change |
-8.3 % to -1.9 % |
-5.7 % |
-6.8 % |
| Ex-transportation – M/M |
-0.1 % to 0.8 % |
+0.4 % |
+0.5 % |
| Core capital goods – M/M change |
0.2 % to 0.5 % |
0.5 % |
+0.4 % |
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