January Durable Goods Orders Better Than Expected

The better-than-expected increase in durable goods orders was partly due to a spike in orders for transportation equipment, which shot up by 3.4% in January after jumping by 1.7% in December. Orders for commercial aircraft and parts soared by 15.6%, more than offsetting a 41.1% nosedive in orders for defense aircraft and parts.

Excluding the sharp increase in orders for transportation equipment, durable goods orders still rose by 0.7% in January following a revised 0.9% advance in December.

The report also showed orders for non-defense capital goods excluding aircraft, a key indicator of business spending, advanced by 0.9% in January after rising by 0.4% in December.

Shipments in the same category, which is the source data for equipment investment in GDP, surged up by 1.9% in January after jumping by 1.6% in December.

Following is the January advance report from the U.S. Census Bureau on durable goods manufacturers’ shipments, inventories, and orders:

New Orders

New orders for manufactured durable goods in January increased $4.3 billion or 1.6% to $277.5 billion. This increase, up eight of the last nine months, followed a 1.2% December increase. Excluding transportation, new orders increased 0.7%. Excluding defense, new orders increased 1.6%. Transportation equipment, up three consecutive months, led the increase by $2.9 billion or 3.4% to $87.6 billion.

Shipments

Shipments of manufactured durable goods in January, up eight of the last nine months, increased $3.1 billion or 1.2% to $270.4 billion. This followed a 1.3% December increase. Machinery, up 10 of the last 11 months, led the increase by $1.0 billion or 2.7% to $38.9 billion.

Unfilled Orders

Unfilled orders for manufactured durable goods in January, up 12 consecutive months, increased $11.4 billion or 0.9% to $1,283.2 billion. This followed a 0.8% December increase. Transportation equipment, up 11 of the last 12 months, led the increase by $9.6 billion or 1.1% to $848.8 billion.

Inventories

Inventories of manufactured durable goods in January, up 12 consecutive months, increased $1.9 billion or 0.4% to $476.0 billion. This followed a 0.8% December increase. Machinery, up 15 consecutive months, led the increase by $0.7 billion or 0.9% to $79.4 billion.

Capital Goods

Nondefense new orders for capital goods in January increased $3.9 billion or 4.2% to $96.9 billion. Shipments increased $1.7 billion or 2.1% to $84.0 billion. Unfilled orders increased $12.9 billion or 1.7% to $793.9 billion. Inventories increased $0.3 billion or 0.1% to $208.0 billion.

Defense new orders for capital goods in January increased $1.4 billion or 15.7% to $10.4 billion. Shipments increased $0.5 billion or 4.2% to $12.9 billion. Unfilled orders decreased $2.5 billion or 1.3% to $185.4 billion. Inventories increased $0.1 billion or 0.5% to $21.5 billion.

Revised and Recently Benchmarked November Data

Revised seasonally adjusted December figures for all manufacturing industries were: new orders, $536.8 billion (revised from $530.7 billion); shipments, $530.9 billion (revised from $528.9 billion); unfilled orders, $1,271.8 billion (revised from $1,267.7 billion) and total inventories, $773.8 billion (revised from $773.0 billion).

By David Schollaert, David@SteelMarketUpdate.com