The headlines say the durable goods new orders declined in January – headline growth is down 3 of the last 4 months. Most sectors were soft lead by a weak civilian aircraft sector.
Econintersect Analysis:
- unadjusted new orders growth accelerated 1.2% month-over-month , and is up 2.4% year-over-year
- the three month rolling average for unadjusted new orders decelerated 1.1% month-over-month, and up 4.5% year-over-year.
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 1.8% year-over-year.
- The December Federal Reserve’s Durable Goods Industrial Production Index growth decelerated 0.7% 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 improving.
Comparing Seasonally Adjusted Durable Goods Shipments (blue line) to Industrial Production Durable Goods (red line)
- unadjusted backlog (unfilled orders) growth decelerated 1.6% month-over-month,.
- aircraft (civilian) were the main reason for the weakness this month (partially offset by an increase in defense capital goods) – but almost all sectors were weak.
- note this is labelled as an advance report – however, backward revisions historically are relatively slight.
Census Headlines:
- new orders down 1.0%Â month-over-month.
- backlog (unfilled orders) was up 0.1% month-over-month – and remains at a historical high.
- the market expected new orders at -4.8% to 2.0% month-over-month (consensus -1.6%) versus the -1.0% actual
Durable Goods sector is the portion of the economy which provides products which have a utility over long periods of time before needing repurchase – like cars, refrigerators and planes.
