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.


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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