Economy

Durable Goods Orders Increase for Sixth Month

December 1, 2020

Orders for manufactured durable goods gained 1.3 percent in October, said the Commerce Department last week, marking the sixth consecutive month of growth. Orders totaled $240.8 billion following a 2.1 percent gain in September.

Transportation orders, up five of the last six months, grew 1.2 percent to $77.1 billion. Orders for commercial aircraft and parts surged 39 percent after three months of no sales. Aircraft orders for defense jumped 79 percent in October.

Motor vehicles and parts orders dipped 3.2 percent to $60.1 billion. The metals industry saw some improvement with orders for fabricated metals up 2.3 percent and primary metals gaining 0.4 percent. Orders for machinery fell 0.6 percent.

Core capital goods—non-defense minus aircraft and a proxy for future investment—rose 0.7 percent following a 1.9 percent surge in September.

Although the economy has been growing, economists are still cautious due to the surge of COVID-19 cases and potential disruptions to business.

The October 2020 advance report on durable goods manufacturers’ shipments, inventories and orders follows:

New Orders

New orders for manufactured durable goods in October increased $3.0 billion or 1.3 percent to $240.8 billion. This increase, up six consecutive months, followed a 2.1 percent September increase. Excluding transportation, new orders increased 1.3 percent. Excluding defense, new orders increased 0.2 percent. Transportation equipment, up five of the last six months, led the increase by $0.9 billion or 1.2 percent to $77.1 billion.

Shipments

Shipments of manufactured durable goods in October, up five of the last six months, increased $3.1 billion or 1.3 percent to $248.7 billion. This followed a 0.5 percent September increase. Fabricated metal products, also up five of the last six months, led the increase by $0.7 billion or 2.4 percent to $30.9 billion.

Unfilled Orders

Unfilled orders for manufactured durable goods in October, down seven of the last eight months, decreased $2.8 billion or 0.3 percent to $1,073.2 billion. This followed a 0.2 percent September decrease. Transportation equipment, down eight consecutive months, drove the decrease by $4.6 billion or 0.6 percent to $717.0 billion.

Inventories

Inventories of manufactured durable goods in October, up two consecutive months, increased $1.3 billion or 0.3 percent to $422.8 billion. This followed a 0.3 percent September increase. Transportation equipment, up 25 of the last 26 months, led the increase by $0.6 billion or 0.4 percent to $148.2 billion.

Capital Goods

Nondefense new orders for capital goods in October decreased $0.2 billion or 0.2 percent to $70.5 billion. Shipments increased $2.6 billion or 3.7 percent to $73.2 billion. Unfilled orders decreased $2.7 billion or 0.5 percent to $591.3 billion. Inventories increased $0.1 billion or virtually unchanged to $193.6 billion. Defense new orders for capital goods in October increased $2.4 billion or 23.1 percent to $12.7 billion. Shipments increased $0.4 billion or 3.3 percent to $12.5 billion. Unfilled orders increased $0.2 billion or 0.1 percent to $179.7 billion. Inventories decreased $0.1 billion or 0.3 percent to $21.5 billion.

Revised September Data

Revised seasonally adjusted September figures for all manufacturing industries were: new orders, $476.0 billion (revised from $475.0 billion); shipments, $483.9 billion (revised from $482.8 billion); unfilled orders, $1,075.9 billion (unchanged); and total inventories, $686.2 billion (revised from $686.7 billion).