The Census Bureau said that new durable goods orders were down sharply, off 4.3 percent in December. This more than offset the 2.6 percent gain in November and was well below the consensus expectation, which had been for modest growth. Weather might have been a factor, as well as the timing of aircraft orders. It will be interesting to see what the January and February data show to see if the December figures were an outlier. Hopefully, future data reflect the uptick in durable goods manufacturing activity that we were seeing in the months before December.
The durable goods orders data were highly volatile in 2013, ranging from $215.0 billion in March to $244.4 billion in June. Highlighting the wide swings in these figures, new durable goods sales rose 10.0 percent between November 2012 and November 2013, but the year-over-year rate was essentially unchanged in December. Much of those swings stemmed from the choppiness of transportation orders. In December, this was also the case. Excluding transportation, new durable goods orders would have declined 1.6 percent, suggesting broader weaknesses beyond aircraft and autos.
Looking at specific sectors, the data were mostly negative. Manufacturers with lower sales in December included computers and electronic products (down 7.8 percent), motor vehicles and parts (down 5.8 percent), fabricated metal products (down 2.8 percent), and primary metals (down 2.1 percent). In contrast, electrical equipment and appliances (up 2.8 percent) and machinery (up 0.8 percent) bucked this trend with increased new orders for the month.
Meanwhile, shipments of durable goods products were also lower, down 1.9 percent as a whole or off 0.3 percent excluding transportation. Beyond the headline figure, the data were mixed. Increased shipments of nondefense aircraft (up 4.5 percent), computers and electronic products (up 0.2 percent), and primary metals (up 0.1 percent) were offset by declines in defense aircraft (down 28.5 percent), motor vehicles and parts (down 5.9 percent), fabricated metal products (down 0.8 percent), and electrical equipment and appliances (down 0.7 percent), among others.
Chad Moutray is the chief economist, National Association of Manufacturers.
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