Economic Charts

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Thursday, December 23, 2010

November Core/Durable Goods

Today the Core Durable and Durable goods number was released today.  Durable goods are the change in the total value of new purchase orders placed with manufacturers for durable goods. Core durable goods is durable goods minus the change in the total value of new purchase orders placed with manufacturers for durable goods, excluding transportation items.  The durable goods number was forecasted to be -0.5%, but the actual headline number was -1.3%.  When you strip out transportation items from the durable goods number (Core Durable Goods) the headline number was 2.4%, which was better than 1.7% that was forecasted.

Having new orders or a strong order pipeline is important to economic health.  The following comments where made with respect to new orders:
New orders for manufactured durable goods in November decreased $2.6 billion or 1.3 percent to $193.7 billion, the U.S. Census Bureau announced today. This decrease, down three of the last four months, followed a 3.1 percent October decrease.  Excluding transportation, new orders increased 2.4 percent. Excluding defense, new orders decreased 2.3 percent
Transportation equipment, also down three of the last four months, had the largest decrease, $6.2 billion or 11.9 percent to $45.5 billion. This was due to nondefense aircraft and parts, which decreased $6.6 billion
 Additionally, build up of new orders is a bad sign.  The following comments were made with respect to inventories:

Inventories of manufactured durable goods in November, up eleven consecutive months, increased $1.9 billion or 0.6 percent to $319.1 billion.  This followed a 0.6 percent October increase. 
Transportation equipment, also up eleven consecutive months, had the largest increase, $1.1 billion or 1.3 percent to $84.3 billion.   

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