Economy

Durable Goods Orders Slip 0.9% in December
Written by David Schollaert
January 28, 2022
Durable goods orders took a slight tumble in December, slipping for the first time in three months and suggesting a pause in capital investment as the fourth quarter ended.
The decline in December – down 0.9% versus the prior month – reflected a drop in orders for commercial aircraft (transportation) and communications equipment, compounded by an upward revision of 3.2% in November’s durable goods orders.
The volatile transportation category, down three of the last four months, was responsible for most of the decline. The report showed bookings for commercial aircraft decreased 14.4% – Boeing Co. reported 80 orders in December, down from 109 a month earlier – while orders for motor vehicles rose 1.4% in December. Durable goods orders excluding transportation equipment advanced 0.4% last month.
The value of core capital goods orders – orders excluding defense and transportation and a proxy for business investment in equipment – was little changed after climbing a revised 0.3% in the prior month, according to the Commerce Department.
In a separate government report, outlays for business equipment rose an annualized 0.8% in the fourth quarter after a 2.3% decline the prior quarter. The government’s first estimate of the period’s gross domestic product accelerated at a 6.9% annualized pace in the fourth quarter, well ahead of 5.5% estimates and above 2.3% growth in Q3.
Following is the December advance report from the U.S. Census Bureau on durable goods manufacturers’ shipments, inventories and orders:
New Orders
New orders for manufactured durable goods in December decreased $2.4 billion, or 0.9% to $267.6 billion, This decrease, down following two consecutive monthly increases, followed a 3.2% November increase. Excluding transportation, new orders increased 0.4%. Excluding defense, new orders increased 0.1%. Transportation equipment, down three of the last four months, drove a decrease of $3.3 billion, or 3.9%, to $80.1 billion.
Shipments
Shipments of manufactured durable goods in December, up seven of the last eight months, increased $2.2 billion or 0.8% to $266.0 billion. This followed a 0.8% November increase. Transportation equipment, up three consecutive months, led the increase. It was up $0.7 billion, or 0.9%, to $77.4 billion.
Unfilled Orders
Unfilled orders for manufactured durable goods in December, up 11 consecutive months, increased $6.0 billion, or 0.5%, to $1.268 trillion. This followed a 0.8% November increase. Transportation equipment, up 10 of the last 11 months, led the increase – up $2.8 billion, or 0.3%, to $835.1 billion.
Inventories
Inventories of manufactured durable goods in December, up 11 consecutive months, increased $3.3 billion, or 0.7%, to $473.6 billion. This followed a 0.8% November increase. Machinery, up 14 consecutive months, led the increase – up $0.8 billion, or 1.0%, to $78.4 billion.
Capital Goods
Nondefense new orders for capital goods in December decreased $2.1 billion, or 2.4%, to $87.4 billion. Shipments increased $0.9 billion, or 1.1%, to $82.0 billion. Unfilled orders increased $5.4 billion, or 0.7%, to $775.7 billion. Inventories increased $1.4 billion, or 0.7%, to $207.6 billion.
Defense new orders for capital goods in December decreased $3.9 billion, or 28.4%, to $9.8 billion. Shipments decreased $0.3 billion, or 2.3%, to $12.3 billion. Unfilled orders decreased $2.5 billion, or 1.3%, to $188.7 billion. Inventories decreased less than $0.1 billion, or virtually unchanged at $21.3 billion.
Revised and Recently Benchmarked November Data
Revised seasonally adjusted November figures for all manufacturing industries were as follows: new orders, $533.1 billion (revised from $531.8 billion); shipments, $526.9 billion (revised from $527.0 billion); unfilled orders, $1,261.5 billion (revised from $1,260.1 billion); and total inventories, $770.7 billion (revised from $770.0 billion).
By David Schollaert, David@SteelMarketUpdate.com

David Schollaert
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