The Census Bureau said that new durable goods orders fell 1.0 percent in January, extending the 5.3 percent decline observed in December. Much of the decline in January was the result of reduced motor vehicle and nondefense aircraft sales. For autos, poor weather conditions were likely a factor, limiting customers’ ability to visit showrooms; whereas, aircraft orders tend to come in waves.
Excluding transportation sales, new orders were up 1.1 percent, mostly offsetting the 1.9 percent decline from the month before. As such, the broader market was slightly better than the headline figure suggested. Indeed, new orders were higher for the month for fabricated metal products (up 7.3 percent) and computers and electronic products (up 4.7 percent). Still, there were notable decreases for primary metals (down 2.3 percent), electrical equipment and appliances (down 2.1 percent), and machinery (down 0.4 percent).
On a year-over-year basis, durable good orders rose 4.6 percent. Yet, that only tells part of the story. New orders were quite volatile over the past 12 months, ranging from a low of $215.1 billion in January 2013 to a high of $244.4 billion in June 2013. A similar story could be said for new durable goods orders excluding transportation, which increased 3.4 percent over the past 12 months but were also quite volatile throughout the year. In fact, this broader measure of sales has been essentially flat since May 2013.
Meanwhile, shipments of durable goods were down 0.4 percent in January, building on the 1.8 percent decreases of December. Excluding transportation, shipments would have fallen 0.5 percent for the month, with fewer motor vehicle shipments (down 2.1 percent) pulling the overall figure lower. For shipments, increases for defense aircraft and parts (up 13.8 percent), nondefense aircraft and parts (up 4.0 percent), computers and electronic products (up 1.6 percent) and electrical equipment and appliances (up 1.4 percent) offset decreases in machinery (down 2.6 percent) and primary metals (down 1.6 percent).
Chad Moutray is the chief economist, National Association of Manufacturers.