Economy

Durable Goods Orders Dip in October

November 26, 2017

New orders for manufactured durable goods declined 1.2 percent in October to $236.0 billion, according to the latest data from the U.S. Census Bureau. The decline was due mostly to plummeting orders for commercial aircraft, which fell 18.6 percent last month.

Core capital goods (non-defense capital goods minus aircraft) declined 0.5 percent last month. Reuters expected an increase of 0.5 percent after core capital goods gained 1.7 percent in September. The category is seen as a proxy for business spending.

Shipments of core capital goods, used to calculate equipment spending in gross domestic product (GDP) measurements, advanced 0.4 percent. Shipments slowed from the 1.2 percent gain in September.

“The upshot is that, after expanding at rapid pace of nearly 9 percent annualized in both the second and third quarters, equipment investment looks to be on course for another strong gain in the fourth quarter,” said U.S. economist Andrew Hunter at Capital Economics.

The Census Bureau’s October Advance Report on Manufacturers’ Shipments, Inventories, and Orders is below:

New Orders

New orders for manufactured durable goods in October decreased $2.8 billion or 1.2 percent to $236.0 billion. This decrease followed a 2.2 percent September increase. Excluding transportation, new orders increased 0.4 percent. Excluding defense, new orders decreased 0.8 percent. Transportation equipment, also down following two consecutive monthly increases, drove the decrease by $3.5 billion or 4.3 percent to $77.1 billion.

Shipments

Shipments of manufactured durable goods in October, up five of the last six months, increased $0.3 billion or 0.1 percent to $241.0 billion. This followed a 1.0 percent September increase. Primary metals, up three of the last four months, led the increase by $0.3 billion or 1.5 percent to $19.9 billion.

Unfilled Orders

Unfilled orders for manufactured durable goods in October, down three of the last four months, decreased $0.5 billion to $1,134.6 billion. This followed a 0.2 percent September increase. Transportation equipment, also down three of the last four months, drove the decrease by $2.0 billion or 0.3 percent to $769.7 billion.

Inventories

Inventories of manufactured durable goods in October, up 15 of the last 16 months, increased $0.5 billion or 0.1 percent to $404.1 billion. This followed a 0.6 percent September increase. Primary metals, also up 15 of the last 16 months, led the increase by $0.1 billion or 0.4 percent to $33.9 billion.

Capital Goods

Non-defense new orders for capital goods in October decreased $3.4 billion or 4.5 percent to $72.3 billion. Shipments decreased $1.4 billion or 1.9 percent to $72.4 billion. Unfilled orders were virtually unchanged, decreasing by $0.1 billion to $705.2 billion. Inventories increased less than $0.1 billion to $179.7 billion. Defense new orders for capital goods in October decreased $1.1 billion or 9.6 percent to $9.9 billion. Shipments increased $0.3 billion or 2.4 percent to $10.9 billion. Unfilled orders decreased $0.9 billion or 0.7 percent to $142.3 billion. Inventories increased $0.2 billion or 1.0 percent to $23.6 billion.

Revised September Data

Revised seasonally adjusted September figures for all manufacturing industries were: new orders, $479.1 billion (revised from $478.5 billion); shipments, $480.9 billion (revised from $480.4 billion); unfilled orders, $1,135.1 billion (revised from $1,135.0 billion).