January Durable Goods Report Shows A Rebound

The Advance Report on Manufacturers’ Shipments, Inventories and Orders released today gives us a first look at the December durable goods numbers. Here is the Bureau’s summary on new orders:

New orders for manufactured durable goods in December decreased $12.0 billion or 5.1 percent to $225.4 billion, the U.S. Census Bureau announced today. This decrease, down four of the last five months, followed a 0.5 percent November decrease. Excluding transportation, new orders decreased 1.2 percent. Excluding defense, new orders decreased 2.9 percent.

Transportation equipment, also down four of the last five months, led the decrease, $10.1 billion or 12.4 percent to $71.3 billion. Download full PDF

The Advance Report on Manufacturers’ Shipments, Inventories and Orders released today gives us a first look at the January durable goods numbers. The latest new orders headline number at 4.9% percent was above the Investing.com estimate of 2.5 percent. This series is up 1.8 percent year-over-year (YoY). If we exclude transportation, “core” durable goods came in at 1.8 percent month-over-month (MoM), which was above the Investing.com estimate of 0.2% percent. The core measure is down -0.6 percent YoY.

If we exclude both transportation and defense for an even more fundamental “core”, the latest number is up at 1.0 percent MoM and is down at -2.3 percent YoY.

Core Capital Goods New Orders (nondefense capital goods used in the production of goods or services, excluding aircraft) is an important gauge of business spending, often referred to as Core Capex. It posted a 3.9 percent monthly advance but is down 2.8 percent YoY.

For a look at the big picture and an understanding of the relative size of the major components, here is an area chart of Durable Goods New Orders minus Transportation and Defense with those two components stacked on top. We’ve also included a dotted line to show the relative size of Core Capex.