Headline Durable Goods New Orders Improved Again In December 2020

The headlines say the durable goods new orders improved for the eighth consecutive month. Our analysis shows the rolling averages improved.


Analyst Opinion of the Durable Goods Situation

The data this month was within expectations - and, the previous month was revised up.

In the adjusted data, the improvement was again driven by defense aircraft and motor vehicles

Econintersect Analysis:

  • unadjusted new orders growth was unchanged (after accelerating 4.6 % the previous month) month-over-month and is now up 3.8 % year-over-year.
  • the three month rolling average for unadjusted new orders accelerating 1.3 % month-over-month and up 2.2 % year-over-year.

Year-over-Year Change of 3 Month Rolling Average - Unadjusted (blue line) and Inflation Adjusted (red line)

z durable1.png

  • Inflation-adjusted but otherwise unadjusted new orders are up 2.6 % year-over-year
  • Backlog (unfilled orders) accelerated 0.1 % month-over-month and is down 6.8 % year-over-year.
  • The Federal Reserve's Durable Goods Industrial Production Index (seasonally adjusted) growth up 1.0 % month-over-month, down 3.0 % year-over-year [note that this is a series with moderate backward revision - and it uses production as a pulse point (not new orders or shipments)].

Comparing Seasonally Adjusted Durable Goods Shipments (blue line) to Industrial Production Durable Goods (red line)

  • note this is labeled as an advance report - however, backward revisions historically are relatively slight.

Census Headlines:

  • new orders up 0.2 % month-over-month.
  • backlog (unfilled orders) down 0.3 % month-over-month.
  • the market expected (from Econoday):
  Consensus Range Consensus Actual
New Orders - M/M change 0.7 % to 2.5 % +1.0 % +0.2 %
Ex-transportation - M/M 0.2 % to 1.0 % +0.5 % +0.7 %
Core capital goods - M/M change 0.2 % to 0.6 % +0.4 % +0.6 %
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