- Prior was +7.9% (revised to +8.5%)
- Durable goods orders ex-transport +1.3% vs +0.6% expected
- Prior ex-transport +1.1% (revised to +1.4%)
- Durable goods ex-defense -4.6% vs +8.1% prior (revised to +8.4%)
- Non-defense capital goods ex-air +1.6% vs +0.6% expected
- Prior -1.0% (revised to -0.7%)
This is not a bad report with the more important non-defense capital goods ex-air beating expectations by a notable margin. The durable goods data is very volatile and prone to revisions, so it’s almost never a market-moving release.
New orders for manufactured durable goods in May, down following two consecutive monthly increases, decreased $15.6 billion or 4.5 percent to $332.1 billion, the U.S. Census Bureau announced today. This followed an 8.5 percent April increase. Excluding transportation, new orders increased 1.3 percent. Excluding defense, new orders decreased 4.6 percent. Transportation equipment, also down following two consecutive monthly increases, drove the decrease, $18.5 billion or 14.0 percent to $113.5 billion.
For background, the Advance Report on Durable Goods Manufacturers’ Shipments, Inventories, and Orders, published monthly by the U.S. Census Bureau, is one of the most closely watched gauges of U.S. manufacturing activity and business investment. Released about 18 working days after each reference month at 8:30 a.m. ET, it covers new orders, shipments, unfilled orders, and inventories of products meant to last three or more years, from aircraft, vehicles, and machinery to computers and appliances.
A more comprehensive Manufacturers’ Shipments, Inventories, and Orders (M3) release follows roughly a week later. Headline durable goods orders are notoriously volatile, swinging on lumpy aircraft and defense bookings, so analysts focus on two cleaner cuts: new orders excluding transportation, which strips out Boeing-driven swings, and nondefense capital goods orders excluding aircraft, the so-called “core capex” series, which is treated as a real-time proxy for business investment intentions and feeds into GDP estimates.
This article was written by Giuseppe Dellamotta at investinglive.com.
