The headlines say the durable goods new orders improved. Our analysis agrees – and if you ignore defense aircraft, durable goods were again very soft month-over-month. 

Econintersect Analysis:

  • unadjusted new orders growth accelerated 0.3% (after decelerating a revised 2.1% the previous month) month-over-month , but is up 5.4% year-over-year. 
  • the three month rolling average for unadjusted new orders decelerated 10.6% month-over-month, and up 5.9% year-over-year. The reason for the decline in the rolling averages was the massive spike in the July 2014 data is no longer in the 3 month rolling averages.

    • Year-over-Year Change of 3 Month Rolling Average – Unadjusted (blue line) and Inflation Adjusted (red line)

  • Inflation adjusted but otherwise unadjusted new orders are up 4.2% year-over-year.
  • The Federal Reserve’s Durable Goods Industrial Production Index (seasonally adjusted) growth accelerated 0.3% month-over-month, up 2.8% 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)

  • unadjusted backlog (unfilled orders) growth decelerated 1.0% month-over-month, up 12.4% year-over-year.
  • according to the seasonally adjusted data, the major force on the data was the increase in defense aircraft. Most other areas declined marginally month-over-month.
  • note this is labelled as an advance report – however, backward revisions historically are relatively slight.

    • Census Headlines:

  • new orders up 0.4% month-over-month.
  • backlog (unfilled orders) was up 0.4% month-over-month – and remains at a historical high.
  • the market expected: 
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