The January Advance Report on December Durable Goods was released this morning by the Census Bureau. Here is the Bureau's summary on new orders:

New orders for manufactured durable goods in December decreased $10.3 billion or 4.3 percent to $229.3 billion, the U.S. Census Bureau announced today. This decrease, down two of the last three months, followed a 2.6 percent November increase. Excluding transportation, new orders decreased 1.6 percent. Excluding defense, new orders decreased 3.7 percent.

Transportation equipment, also down two of the last three months, led the decrease, $7.7 billion or 9.5 percent to $73.1 billion. This was led by nondefense aircraft and parts, which decreased $3.8 billion. Download full PDF

The latest new orders number came in at -4.3% percent month-over-month, a dramatic plunge and way below the Investing.com forecast of 1.8 percent. Year-over-year new orders were up a mere 0.1 percent.

If we exclude transportation, "core" durable goods came in at -1.6 percent MoM and 2.9 percent YoY. Investing.com was looking for a 0.5 percent MoM increase.

If we exclude both transportation and defense, durable goods came in at -0.5 percent MoM but up 13.3 percent YoY (attributable to the -11.7 percent drop in December 2012, courtesy of the Fiscal Cliff).

The Core Capital Goods number (captial goods used in the production of goods or services) was also negative at -1.3 percent MoM, but the YoY number is a positive 6.2 percent, similarly attributable in large part to the comparison with the Fiscal Cliff belt-tightening of December 2012.

The first chart is an overlay of durable goods new orders and the S&P 500. We see an obvious correlation between the two, especially over the past decade, with the market, not surprisingly, as the more volatile of the two. Over the past year, the market has certainly pulled away from the durable goods reality, something we also saw in the late 1990s.

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An overlay with unemployment (inverted) also shows some correlation. We saw unemployment begin to deteriorate prior to the peak in durable goods orders that closely coincided with the onset of the Great Recession, but the unemployment recovery tended to lag the advance durable goods orders.

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Here is an overlay with GDP — another comparison I like to watch.

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The next chart shows the percent change in Core Durable Goods (which excludes transportation) overlaid on the headline number.

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Here is a similar overlay, this time excluding Defense as well as Transportation (an even more "core" number).

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This last chart is an overlay of Core Capital Goods on the larger series. This takes a step back in the durable goods process to show Manufacturers' New Orders for Nondefense Capital Goods Excluding Aircraft.

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In theory the durable goods orders series should be one of the more important indicators of the economy's health. But its volatility and susceptibility to major revisions of the previous monthly data suggest caution in taking the data for any particular month too seriously.