Economy

Durable Goods Core Orders Rose 0.5 Percent

December 22, 2016

Durable goods orders decreased 4.6 percent in November to $228.2 billion, according to the latest report from the Department of Commerce. The drop follows four months of consecutive increases. Durable goods are products designed to have a lifespan of longer than three years, such as machinery and computers.

The decline in November was driven by a 73.5 percent decrease in civilian aircraft orders. Orders for transportation equipment in general, a volatile component of manufacturing activity, fell 13.2 percent for its biggest decline in more than two years.

Core orders, durable goods orders minus transportation equipment, rose 0.5 percent. Core capital goods (which exclude defense goods and aircraft and are considered a proxy for business investment) rose 0.9 percent, the most since August.

“Core orders are a particularly important series to follow over the next few months as we try to discern whether investment spending is picking up in post-election data. Today’s number implies that at the very least equipment investment did not decline and may be a first hint that it is on a more favorable trajectory,” said economists at Citi in a note to clients.

The Advance Report on Durable Goods Manufacturers’ Shipments, Inventories and Orders for November 2016 is reprinted below:

New Orders. New orders for manufactured durable goods in November decreased $11.0 billion or 4.6 percent to $228.2 billion, the U.S. Census Bureau announced today. This decrease, down following four consecutive monthly increases, followed a 4.8 percent October increase. Excluding transportation, new orders increased 0.5 percent. Excluding defense, new orders decreased 6.6 percent. Transportation equipment, also down following four consecutive monthly increases, drove the decrease, $11.7 billion or 13.2 percent to $76.6 billion.

Shipments. Shipments of manufactured durable goods in November, up two of the last three months, increased $0.2 billion or 0.1 percent to $234.2 billion. This followed a 0.1 percent October decrease. Primary metals, also up two of the last three months, drove the increase, $0.3 billion or 1.7 percent to $18.0 billion.

Unfilled Orders. Unfilled orders for manufactured durable goods in November, down five of the last six months, decreased $2.3 billion or 0.2 percent to $1,126.7 billion. This followed a 0.8 percent October increase. Transportation equipment, also down five of the last six months, drove the decrease, $3.6 billion or 0.5 percent to $769.8 billion.

Inventories. Inventories of manufactured durable goods in November, up four of the last five months, increased $0.6 billion or 0.1 percent to $384.0 billion. This followed a virtually unchanged October decrease. Transportation equipment, also up four of the last five months, led the increase, $0.3 billion or 0.2 percent to $124.1 billion.

Capital Goods. Nondefense new orders for capital goods in November decreased $15.6 billion or 19.5 percent to $64.4 billion. Shipments decreased $0.9 billion or 1.2 percent to $70.3 billion. Unfilled orders decreased $5.9 billion or 0.8 percent to $697.1 billion. Inventories increased $0.5 billion or 0.3 percent to $170.1 billion. Defense new orders for capital goods in November increased $3.2 billion or 29.1 percent to $14.3 billion. Shipments increased $0.3 billion or 2.9 percent to $11.0 billion. Unfilled orders increased $3.3 billion or 2.4 percent to $142.2 billion. Inventories decreased $0.2 billion or 1.1 percent to $20.9 billion.

Revised October Data. Revised seasonally adjusted October figures for all manufacturing industries were: new orders, $469.9 billion (revised from $469.4 billion); shipments, $464.8 billion (revised from $464.7 billion); unfilled orders, $1,129.0 billion (revised from $1,128.5 billion) and total inventories, $621.3 billion (revised from $621.4 billion).