Economy

January Durable Goods Orders Better Than Expected
Written by David Schollaert
February 25, 2022
New orders for U.S. manufactured durable goods rose 1.6% in January, doubling earlier estimates of 0.8%, according to the Commerce Department’s report. The surprising gain came following an upward revision in December’s totals to a 1.2% gain from the prior estimate of 0.7% and represents an increase in eight of the last nine months.
The improvement indicates that the durable goods sector looks to be in much better shape than originally expected, as earlier estimates were suggesting a pause in capital investment when fourth-quarter 2021 ended.
The better-than-expected increase in durable goods orders was partly due to a spike in orders for transportation equipment, which shot up by 3.4% in January after jumping by 1.7% in December. Orders for commercial aircraft and parts soared by 15.6%, more than offsetting a 41.1% nosedive in orders for defense aircraft and parts.
Excluding the sharp increase in orders for transportation equipment, durable goods orders still rose by 0.7% in January following a revised 0.9% advance in December.
The report also showed orders for non-defense capital goods excluding aircraft, a key indicator of business spending, advanced by 0.9% in January after rising by 0.4% in December.
Shipments in the same category, which is the source data for equipment investment in GDP, surged up by 1.9% in January after jumping by 1.6% in December.
Following is the January 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 January increased $4.3 billion or 1.6% to $277.5 billion. This increase, up eight of the last nine months, followed a 1.2% December increase. Excluding transportation, new orders increased 0.7%. Excluding defense, new orders increased 1.6%. Transportation equipment, up three consecutive months, led the increase by $2.9 billion or 3.4% to $87.6 billion.
Shipments
Shipments of manufactured durable goods in January, up eight of the last nine months, increased $3.1 billion or 1.2% to $270.4 billion. This followed a 1.3% December increase. Machinery, up 10 of the last 11 months, led the increase by $1.0 billion or 2.7% to $38.9 billion.
Unfilled Orders
Unfilled orders for manufactured durable goods in January, up 12 consecutive months, increased $11.4 billion or 0.9% to $1,283.2 billion. This followed a 0.8% December increase. Transportation equipment, up 11 of the last 12 months, led the increase by $9.6 billion or 1.1% to $848.8 billion.
Inventories
Inventories of manufactured durable goods in January, up 12 consecutive months, increased $1.9 billion or 0.4% to $476.0 billion. This followed a 0.8% December increase. Machinery, up 15 consecutive months, led the increase by $0.7 billion or 0.9% to $79.4 billion.
Capital Goods
Nondefense new orders for capital goods in January increased $3.9 billion or 4.2% to $96.9 billion. Shipments increased $1.7 billion or 2.1% to $84.0 billion. Unfilled orders increased $12.9 billion or 1.7% to $793.9 billion. Inventories increased $0.3 billion or 0.1% to $208.0 billion.
Defense new orders for capital goods in January increased $1.4 billion or 15.7% to $10.4 billion. Shipments increased $0.5 billion or 4.2% to $12.9 billion. Unfilled orders decreased $2.5 billion or 1.3% to $185.4 billion. Inventories increased $0.1 billion or 0.5% to $21.5 billion.
Revised and Recently Benchmarked November Data
Revised seasonally adjusted December figures for all manufacturing industries were: new orders, $536.8 billion (revised from $530.7 billion); shipments, $530.9 billion (revised from $528.9 billion); unfilled orders, $1,271.8 billion (revised from $1,267.7 billion) and total inventories, $773.8 billion (revised from $773.0 billion).
By David Schollaert, David@SteelMarketUpdate.com

David Schollaert
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