Headline Durable Goods Orders Up 1.2% In December

The Advance Report on Manufacturers’ Shipments, Inventories, and Orders released today gives us a first look at the latest durable goods numbers. Here is the Bureau's summary on new orders:

Data collection and processing were delayed for this indicator release due to the lapse in federal funding from December 22, 2018 through January 25, 2019. Processing and data quality were monitored throughout, and response and coverage rates were at or above normal levels for this release.

New orders for manufactured durable goods in November increased $1.9 billion or 0.8 percent to $250.8 billion, the U.S. Census Bureau announced today. This increase, up following two consecutive monthly decreases, followed a 4.3 percent October decrease. Excluding transportation, new orders decreased 0.3 percent. Excluding defense, new orders decreased 0.1 percent. Transportation equipment, up three of the last four months, drove the increase, $2.5 billion or 2.9 percent to $87.0 billion. Download full PDF

The latest new orders number at 1.2% month-over-month (MoM) was better than the Investing.com consensus of 0.8%. The series is up 3.5% year-over-year (YoY).

If we exclude transportation, "core" durable goods came in at 0.1% MoM, which was worse than the Investing.comconsensus of 0.2%. The core measure is up 3.5% YoY.

If we exclude both transportation and defense for an even more fundamental "core", the latest number is up 1.0% MoM and up 1.9% YoY.

Core Capital Goods New Orders (nondefense capital goods used in the production of goods or services, excluding aircraft) is an important gauge of business spending, often referred to as Core Capex. It is down 0.7% MoM and up 2.5% YoY.

For a look at the big picture and an understanding of the relative size of the major components, here is an area chart of Durable Goods New Orders minus Transportation and Defense with those two components stacked on top. We've also included a dotted line to show the relative size of Core Capex.

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