Economy

Durable Goods Orders, Minus Transportation, Show Increase

May 29, 2018

Orders for manufactured goods fell 1.7 percent in April to $248.5 billion, according to the latest Commerce Department data. Transportation equipment drove the decrease, declining $5.6 billion, or 6.1 percent, to $87.1 billion. Orders for commercial jets plummeted 29 percent in April after soaring 61 percent in March. Excluding transportation orders, the index rose 0.9 percent.

Core capital goods orders, minus defense and aircraft, rose 1 percent in April, reversing March’s 0.9 percent decline and signaling a rebound in business investment after a slow first quarter.

“April’s durable goods orders suggest a plateau may be approaching,” said Carl Riccadonna and Niraj Shah of Bloomberg Economics. “Headline orders were distorted by a pullback in aircraft orders, but the underlying details confirm a pattern also evident in the industrial production data and recent ISM surveys — the pace of activity appears to be leveling out. By no means does this imply that a downturn is coming; rather, like the guidance given by a major U.S. manufacturer in a recent quarterly earnings call, the current state of factory sector conditions may be as good as it gets in the present economic cycle.”

The April advance report on manufacturers’ shipments, inventories and orders follows:

New Orders

New orders for manufactured durable goods in April decreased $4.2 billion or 1.7 percent to $248.5 billion, the U.S. Census Bureau announced. This decrease, down following two consecutive monthly increases, followed a 2.7 percent March increase. Excluding transportation, new orders increased 0.9 percent. Excluding defense, new orders decreased 1.9 percent. Transportation equipment, also down following two consecutive monthly increases, drove the decrease by $5.6 billion or 6.1 percent to $87.1 billion.

Shipments

Shipments of manufactured durable goods in April, down following eight consecutive monthly increases, decreased $0.1 billion or 0.1 percent to $246.7 billion. This followed a 0.7 percent March increase. Transportation equipment, down following three consecutive monthly increases, drove the decrease by $1.8 billion or 2.1 percent to $82.8 billion.

Unfilled Orders

Unfilled orders for manufactured durable goods in April, up five of the last six months, increased $5.5 billion or 0.5 percent to $1,153.4 billion. This followed a 0.8 percent March increase. Transportation equipment, also up five of the last six months, led the increase by $4.2 billion or 0.5 percent to $796.2 billion.

Inventories

Inventories of manufactured durable goods in April, up 17 of the last 18 months, increased $1.2 billion or 0.3 percent to $401.7 billion. This followed a 0.2 percent March increase. Fabricated metal products, up 15 of the last 16 months, led the increase by $0.4 billion or 0.8 percent to $52.0 billion.

Capital Goods

Nondefense new orders for capital goods in April decreased by $5.7 billion or 6.8 percent to $78.6 billion. Shipments decreased by $3.6 billion or 4.6 percent to $74.1 billion. Unfilled orders increased by $4.5 billion or 0.6 percent to $713.9 billion. Inventories increased by $0.8 billion or 0.5 percent to $176.1 billion. Defense new orders for capital goods in April increased by $0.3 billion or 3.1 percent to $11.0 billion. Shipments increased by $1.4 billion or 12.9 percent to $12.0 billion. Unfilled orders decreased by $1.1 billion or 0.7 percent to $144.7 billion. Inventories decreased by $0.3 billion or 1.4 percent to $22.2 billion.

Revised and Recently Benchmarked March Data

Revised seasonally adjusted March figures for all manufacturing industries were: new orders, $498.4 billion (revised from $498.3 billion); shipments, $492.6 billion (revised from $492.2 billion); unfilled orders, $1,147.8 billion (revised from $1,148.2 billion); and total inventories, $664.8 billion (revised from $664.3 billion).