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US Durable Goods Orders

Posted by Joseph Trevisani on Mar 26, 2013 10:51:00 AM

Orders for long-term goods jumped 5.7% in February erasing the revised 3.8% drop in January but the details of the report indicate weakness in business and consumer purchases. Economists had predicted 3.9% gain in February.  The initial January release was -5.2%

Excluding placements in the transportation sector, the 'durables ex-transport' number was -0.5% in February well under the 0.6% prediction and January's upwardly revised 2.9% reading, initially reported at 1.9%.

Orders for long-term business goods, also called 'capital goods orders, non-defense, ex-aircraft', a commonly used economic proxy for business investment fell 2.7% in February more than double the -1.1% forecast and far from the January positive revision at 6.7%, originally 6.3%.

The seeming boom in overall good orders was led by demand for transportation equipment which surged 21.7% in February as orders for civilian aircraft soared 95.3%.  Boeing Company of Chicago recorded 143 new orders in February compared to only 2 in January.  Automobile orders grew 3.8%.

Over the last twelve months durable goods order are up 1.2% an improvement from the flat readings in January and December. Over the past five years durable goods orders have averaged a 1.0% yearly gain each month.  In 2010 that gain averaged 27.2% as consumers returned to stores after purchases plummeted more than 40% from June 2008 to February 2009.

 

Joseph Trevisani

 

Chief Market Strategist

 

WorldWideMarkets


 

Charts: Bloomberg

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