Economy

Transportation Drives Increase in Durable Goods Orders

March 13, 2019

Orders for manufactured durable goods increased for the third month in a row, gaining 0.4 percent in January despite economists’ predictions of a decline.

Orders were driven by an increase in transportation orders, especially orders for civilian aircraft, which grew 15.9 percent. Excluding the volatile transportation category, durable goods orders declined 0.1 percent.

Core capital goods orders, non-defense and excluding aircraft, climbed 0.8 percent from December for its strongest growth since summer 2018.

MarketWatch commented, “By most measures the industrial side of the economy has gotten off to a slower start in 2019. A weaker global economy and stronger dollar have curbed exports and are likely to limit growth in the months ahead, even if the trade dispute with China is resolved.”

The January advance report on manufacturers’ shipments, inventories and orders, delayed by the partial government shutdown, follows:

New Orders

New orders for manufactured durable goods in January increased $0.9 billion or 0.4 percent to $255.3 billion, the U.S. Census Bureau announced. This increase, up three consecutive months, followed a 1.3 percent December increase. Excluding transportation, new orders decreased 0.1 percent. Excluding defense, new orders increased 0.7 percent. Transportation equipment, up five of the last six months, drove the increase by $1.0 billion or 1.2 percent to $90.9 billion.

Shipments

Shipments of manufactured durable goods in January, down following two consecutive monthly increases, decreased $1.3 billion or 0.5 percent to $257.9 billion. This followed a 0.7 percent December increase. Transportation equipment, also down following two consecutive monthly increases, drove the decrease by $1.3 billion or 1.4 percent to $90.0 billion.

Unfilled Orders

Unfilled orders for manufactured durable goods in January, up following three consecutive monthly decreases, increased $1.4 billion or 0.1 percent to $1,181.9 billion. This followed a 0.1 percent December decrease. Transportation equipment, also up following three consecutive monthly decreases, led the increase by $0.9 billion or 0.1 percent to $811.6 billion.

Inventories

Inventories of manufactured durable goods in January, up 24 of the last 25 months, increased $1.7 billion or 0.4 percent to $417.0 billion. This followed a 0.3 percent December increase. Transportation equipment, up four of the last five months, led the increase by $1.2 billion or 0.9 percent to $132.6 billion.

Capital Goods

Nondefense new orders for capital goods in January increased $2.0 billion or 2.5 percent to $80.3 billion. Shipments decreased $1.3 billion or 1.6 percent to $78.4 billion. Unfilled orders increased $1.9 billion or 0.3 percent to $711.0 billion. Inventories increased $0.9 billion or 0.5 percent to $182.8 billion. Defense new orders for capital goods in January decreased $0.3 billion or 2.3 percent to $12.5 billion. Shipments increased $0.4 billion or 3.4 percent to $13.0 billion. Unfilled orders decreased $0.5 billion or 0.3 percent to $156.0 billion. Inventories increased $0.4 billion or 1.6 percent to $23.0 billion.

Revised December Data

Revised seasonally adjusted December figures for all manufacturing industries were: new orders, $500.1 billion (revised from $499.9 billion); shipments, $504.9 billion (unchanged); unfilled orders, $1,180.5 billion (revised from $1,180.3 billion); and total inventories, $681.8 billion (revised from $681.5 billion).