Headline Durable Goods Orders Up 15.8% in May, Better Than Expected
The Advance Report on Manufacturers’ Shipments, Inventories, and Orders released today gives us a first look at the latest durable goods numbers. Here is the Bureau's summary on new orders:
New orders for manufactured durable goods in December increased $5.7 billion or 2.4 percent to $245.5 billion, the U.S. Census Bureau announced today. This increase, up two of the last three months, followed a 3.1 percent November decrease. Excluding transportation, new orders decreased 0.1 percent. Excluding defense, new orders decreased 2.5 percent. Transportation equipment, up following three consecutive monthly decreases, drove the increase, $5.9 billion or 7.6 percent to $82.9 billion. Download full PDF
The latest new orders number at 15.8% month-over-month (MoM) was better than the Investing.com 10.9% estimate. The series is down 17.9% year-over-year (YoY).
If we exclude transportation, "core" durable goods was up 4% MoM, which was better than the Investing.com consensus of 2.5%. The core measure is down 6.3% YoY.
If we exclude both transportation and defense for an even more fundamental "core", the latest number is up 2.4% MoM and down 6.4% 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 is up 2.3% MoM and down 3.6% 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 the year-over-year percent change in Durable Goods. We've highlighted the value at recession starts and the latest value for this metric.