Economy
Durable Goods Soar on Aircraft/Defense Orders in August
Written by Sandy Williams
September 26, 2018
Aircraft and defense drove a 4.5 percent increase in new orders for durable goods in August, exceeding economists’ expectations. Aircraft orders jumped 69.1 percent and defense orders surged 44.4 percent last month. Orders for autos and parts, however, fell 1.0 percent. When removing transportation from the mix, orders rose a much softer 0.1 percent.
Core capital goods, manufactured goods excluding defense and aircraft, fell 0.5 percent from July. Due to high business confidence supported by recent tax cuts, the dip in core capital goods is expected to be temporary. So far, the trade war with China has had little impact on the economy, but further escalation could affect confidence and spending by both consumers and businesses, said economists.
The August advance report on manufacturers’ shipments, inventories and orders follows:
New Orders
New orders for manufactured durable goods in August increased $11.1 billion or 4.5 percent to $259.6 billion, the U.S. Census Bureau announced. This increase, up two of the last three months, followed a 1.2 percent July decrease. Excluding transportation, new orders increased 0.1 percent. Excluding defense, new orders increased 2.6 percent. Transportation equipment, also up two of the last three months, led the increase by $10.9 billion or 13.0 percent to $95.3 billion.
Shipments
Shipments of manufactured durable goods in August, up three of the last four months, increased $1.9 billion or 0.8 percent to $253.1 billion. This followed a 0.1 percent July decrease. Transportation equipment, up two of the last three months, led the increase by $1.6 billion or 1.9 percent to $86.0 billion.
Unfilled Orders
Unfilled orders for manufactured durable goods in August, up nine of the last 10 months, increased by $10.4 billion or 0.9 percent to $1,176.5 billion. This followed a 0.1 percent July increase. Transportation equipment, up six of the last seven months, led the increase by $9.3 billion or 1.2 percent to $811.0 billion.
Inventories
Inventories of manufactured durable goods in August, down following 19 consecutive monthly increases, decreased $1.4 billion or 0.4 percent to $407.0 billion. This followed a 1.2 percent July increase. Transportation equipment, down two of the last three months, drove the decrease by $1.8 billion or 1.4 percent to $129.3 billion.
Capital Goods
Nondefense new orders for capital goods in August increased $5.7 billion or 7.6 percent to $81.3 billion. Shipments increased $2.2 billion or 3.0 percent to $77.3 billion. Unfilled orders increased $3.9 billion or 0.5 percent to $718.6 billion. Inventories decreased $1.3 billion or 0.8 percent to $177.4 billion. Defense new orders for capital goods in August increased $4.9 billion or 44.4 percent to $16.0 billion. Shipments increased $0.1 billion or 1.2 percent to $11.6 billion. Unfilled orders increased $4.4 billion or 3.0 percent to $151.5 billion. Inventories decreased $0.2 billion or 0.8 percent to $22.6 billion.
Revised July Data
Revised seasonally adjusted July figures for all manufacturing industries were: new orders, $499.1 billion (revised from $497.8 billion); shipments, $501.8 billion (revised from $501.7 billion); unfilled orders, $1,166.1 billion (revised from $1,164.9 billion) and total inventories, $675.7 billion (revised from $675.8 billion).
Below is a graph showing the history of durable goods shipments and new orders. You will need to view the graph on our website to use its interactive features; you can do so by clicking here. If you need assistance logging in to or navigating the website, please contact Brett at Brett@SteelMarketUpdate.com.
Sandy Williams
Read more from Sandy WilliamsLatest in Economy
Architecture billings flat in October after months of contraction
Architecture firms reported stable billings in October, according to the latest Architecture Billings Index (ABI) released by the American Institute of Architects (AIA) and Deltek. This follows 20 months of contracting business conditions.
Trump taps Lutnick to be Commerce Secretary
President-elect Donald Trump has named Wall Street veteran Howard Lutnick as the new US Secretary of Commerce.
New York state manufacturing activity ramps up to multi-year high
New York state’s manufacturing sector saw substantial recovery in November, according to the latest Empire State Manufacturing Survey from the Federal Reserve Bank of New York.
CRU: Dollar and bond yields rise, metal prices fall as Trump wins election
Donald Trump has won the US presidential election. The Republican party has re-taken control of the Senate. Votes are still being counted in many tight congressional races. But based on results so far, the Republicans seem likely to maintain control of the House of Representatives. If confirmed, this will give Trump considerable scope to pass legislation pursuing his agenda. What this means for US policy is not immediately obvious. Trump will not be inaugurated until Jan. 20. In the coming weeks and months, he will begin to assemble his cabinet, which may give a clearer signal on his policy priorities and approaches. Based on statements he made during the presidential campaign, we have set out the likely direction of his economic policy here and green policy here.
ISM: Manufacturing index fell in Oct to lowest point of ’24
Domestic manufacturing contracted for the seventh straight month in October, according to the latest report from the Institute for Supply Management (ISM). This marks the 23rd time in the last 24 months that it has been in contraction.