Headline Durable Goods New Orders Marginally Slowed In July 2021

The headlines say the durable goods new orders declined. Our analysis shows the rolling averages were little changed.

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Analyst Opinion of the Durable Goods Situation

In the adjusted data, the big weakness was due to civilian aircraft.

Econintersect Analysis:

  • unadjusted new orders growth was decelerated 8.8 % month-over-month and is now up 32.0 % year-over-year because the data is being compared to the post-recession recovery one year ago.
  • the three-month rolling average for unadjusted new orders decelerated 0.1 % month-over-month and up 44.4 % 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 27.0 % year-over-year
  • Backlog (unfilled orders) accelerated 1.4 % month-over-month and is up 3.5 % year-over-year.
  • The Federal Reserve's Durable Goods Industrial Production Index (seasonally adjusted) growth up 2.4 % month-over-month, up 7.5 % 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)]. The year-over-year growth is so high because it is compared to the lockdown one year ago.

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 down 0.1 % month-over-month.
  • backlog (unfilled orders) up 0.3 % month-over-month.
  • the market expected (from Econoday):
  Consensus Range Consensus Actual
New Orders - M/M change -4.0 % to 0.8 % -0.2 % -0.1 %
Ex-transportation - M/M 0.2 % to 0.9 % +0.5 % +0.7 %
Core capital goods - M/M change 0.0 % to 0.6 % +0.5 % +0.0 %
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Disclaimer: No content is to be construed as investment advise and all content is provided for informational purposes only.The reader is solely responsible for determining whether any investment, ...

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