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Durable Goods Show Mixed Results

Orders and shipments of durable goods fell in December amid a larger upward trend, according to the U.S. Census Bureau. NAM Chief Economist Chad Moutray laid out what we’re seeing and what it means.

Topline numbers: “New orders for durable goods fell 0.9% from a record $270.1 billion in November to $267.6 billion in December,” said Moutray.

The big drops: “Sizable decreases occurred for aircraft and parts orders, which can be highly volatile from month to month,” said Moutray. “This led to a 3.9% decline in orders for transportation equipment in December, even with motor vehicles and parts sales rising 1.4% for the month. Excluding transportation equipment, new durable goods orders increased 0.4% in December.”

The details: “In addition to automobiles, demand increased in December for primary metals (up 2.0%), fabricated metal products (up 1.5%) and other durable goods (up 1.2%),” said Moutray. “In contrast, new orders fell for computers and electronic products (down 2.8%), electrical equipment and appliances (down 0.4%) and machinery (down 0.1%). Sales for nondefense capital goods excluding aircraft—a proxy for capital spending in the U.S. economy—were essentially flat, inching up from $79.031 billion in November to $79.065 billion in December, which was a new record.”

The big picture: “Overall, the durable goods data continue to reflect a strong upward trend, even as manufacturers struggle with supply chain bottlenecks, worker shortages and soaring costs,” said Moutray. “New orders have jumped 12.7% over the past 12 months, or 11.9% with transportation equipment excluded. Similarly, core capital goods orders have grown 10.4% since December 2020.” 
Shipments rise: “Meanwhile, durable goods shipments rose 0.8% from $263.8 billion in November to a record $266.0 billion in December,” said Moutray. “On a year-over-year basis, durable goods shipments have risen 8.8%, or 12.6% excluding transportation equipment. In addition, core capital goods shipments increased 1.3% from $76.4 billion to $77.3 billion, an all-time high, with 10.4% growth over the past 12 months.”

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