The Census Bureau reported that new orders for manufactured goods fell a dramatic 5.2 percent in August. Some of this decline is not news, as it had already been announced last week that durable goods orders were down 13.2 percent. The bulk of this decline came from the fact that there were no nondefense aircraft orders reported in August. Motor vehicle, defense aircraft, and shipbuilding numbers were also weaker. Overall, transportation orders declined 34.9 percent.
If you exclude transportation from the analysis, new orders would have risen 0.7 percent in August. This increase clearly came from the nondurables sector, which saw a 2.2 percent gain for the month. The declines among durable goods sectors were fairly broad-based, with the electrical equipment and appliances sector being the lone major component with increased sales in August (up 3.8 percent). Decreases were observed in the machinery (down 5 percent), computers and electronic products (down 3.4 percent), primary metals (down 2.1 percent), fabricated metal products (down 0.4 percent), and furniture (down 0.4 percent) sectors.
Meanwhile, shipments of manufactured goods decreased 0.3 percent in August. Once again, the transportation sector led the durable goods statistics lower (down 2.9 percent). Nondurable goods shipments rose 2.2 percent. Petroleum and coal products shipments increased 6.9 percent, making it the fastest gainer in the nondurable goods sector.
Chad Moutray is chief economist, National Association of Manufacturers.
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