March Headline Durable Goods Orders Down Again, WorseThan Forecast
The Advance Report on Manufacturers’ Shipments, Inventories, and Orders released today gives us a first look at the latest durable goods numbers. Here is the Bureau's summary on new orders:
New orders for manufactured durable goods in March increased $1.6 billion or 0.7 percent to $238.7 billion, the U.S. Census Bureau announced today. This increase, up three consecutive months, followed a 2.3 percent February increase. Excluding transportation, new orders decreased 0.2 percent. Excluding defense, new orders increased 0.1 percent. Transportation equipment, also up three consecutive months, drove the increase, $2.0 billion or 2.4 percent to $83.3 billion. Download full PDF
The latest new orders number at 0.7% month-over-month (MoM) was below the Investing.com consensus of 1.2%. The series is up 4.5% year-over-year (YoY).
If we exclude transportation, "core" durable goods came in at -0.2% MoM, which was below the Investing.com consensus of 0.4%. The core measure is up 4.6% YoY.
If we exclude both transportation and defense for an even more fundamental "core", the latest number is down 1.3% MoM and up 6.4% YoY.
Core Capital Goods New Orders (nondefense capital goods used in the production of goods or services, excluding aircraft) is an important gauge of business spending, often referred to as Core Capex. It increased 0.2% MoM and is up 3.0% YoY.
For a look at the big picture and an understanding of the relative size of the major components, here is an area chart of Durable Goods New Orders minus Transportation and Defense with those two components stacked on top. We've also included a dotted line to show the relative size of Core Capex.
The next chart shows year-over-year percent change in Durable Goods. We've highlighted the value at recession starts and the latest value for this metric.