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 February decreased $6.6 billion or 2.8 percent to $229.4 billion, the U.S. Census Bureau announced today. This decrease, down three of the last four months, followed a 4.2 percent January increase. Excluding transportation, new orders decreased 1.0 percent. Excluding defense, new orders decreased 1.9 percent.
Transportation equipment, also down three of the last four months, led the decrease, $4.9 billion or 6.2 percent to $74.2 billion. Download full PDF
The latest new orders headline number at -2.8% was close to the Investing.com estimate of -2.9%. This series is up 1.8% year-over-year (YoY). If we exclude transportation, “core” durable goods came in at -1.0% month-over-month (MoM), which was below the Investing.com estimate of -0.2%. The core measure is down -0.5% YoY.
If we exclude both transportation and defense for an even more fundamental “core”, the latest number is -1.6% for both MoM and 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 came in at -1.8% monthly and -0.1% 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.
The next chart shows year-over-year percent change in Durable Goods. We’ve highlighted the value at recession starts and the latest value for this metric.
The next chart shows year-over-year percent change in Core Durable Goods (i.e., excluding transportation).
