EmailEconomic
Last Update: 24-May-12 09:13 ET
Durable Orders
Highlights
- Total durable goods orders rose 0.2% (Briefing.com consensus +0.3%) in April after a 3.7% decline in March.
- Durable orders excluding transportation declined by 0.6% (Briefing.com consensus +1.0%) on the heels of a 0.8% decline in March.
Key Factors
- As expected, the overall number was held back by transportation. In this instance, though, defense aircraft and parts was the main culprit with orders dropping 34.0%. Strikingly, orders for nondefense aircraft and parts rose by 7.2% after a 46.6% decline in March.
- There was some notable weakness in orders for machinery (-2.8%), fabricated metal products (-2.0%), and communications equipment (-16.9%), yet motor vehicles and parts remained strong with orders up 5.6% on top of a 1.7% increase in March.
- A good bit of attention is sure to be paid to the 1.9% decline in orders for nondefense capital goods excluding aircraft -- a proxy for business investment -- as that followed a 2.2% decline in March. This will raise concerns about a slowdown trend in business investment stemming from the macro uncertainty.
Big Picture
- Shipments of nondefense capital goods excluding aircraft dropped by 1.4% after a 1.9% increase in March. The decline for this series will prompt a downward revision to our Q2 GDP forecast given our prior expectation that shipments would be flat.
| Category | APR | MAR | FEB | JAN | DEC |
|---|---|---|---|---|---|
| Total Durable Orders | 0.2% | -3.7% | 2.0% | -3.5% | 3.3% |
| Less Defense | 1.2% | -3.9% | 1.4% | -4.0% | 3.9% |
| Less Transport | -0.6% | -0.8% | 1.8% | -2.8% | 2.3% |
| Transportation | 2.1% | -10.5% | 2.6% | -5.2% | 6.3% |
| Capital Goods | -2.5% | -10.6% | 3.1% | -3.4% | 5.2% |
| Nondefense | -0.2% | -12.1% | 1.9% | -5.0% | 6.9% |
| Nondefense/nonaircraft (core cap gds) | -1.9% | -2.2% | 2.9% | -3.4% | 3.5% |
| Defense Cap Goods | -21.5% | 4.0% | 16.2% | 23.1% | -16.4% |
