The Census Bureau said that new durable goods orders were up 1.3 percent in November, rebounding from a decline of 0.4 percent in October. The increase in the latest data stemmed largely from strong transportation equipment sales, including healthy growth for motor vehicles and parts (up 1.4 percent), defense aircraft and parts (up 11.9 percent) and nondefense aircraft and parts (up 14.5 percent). It is important to note that aircraft orders can be highly volatile from month to month, and the November data include robust demand from the Dubai Airshow. Excluding transportation equipment, new durable goods orders edged down by 0.1 percent in November, its first decline in five months.
New durable goods orders have generally trended in the right direction over the course of the past 12 months. In fact, new durable goods orders have jumped 8.2 percent since November 2016. With transportation equipment excluded, the year-over-year rate was 7.0 percent. One of the more important measures in this release is new orders for core capital goods (or nondefense capital goods excluding aircraft), which can often be seen as a proxy for capital spending in the U.S. economy. In November, new orders for core capital goods inched down 0.1 percent, but like the headline number above, the year-over-year pace was a very healthy 8.1 percent.
Looking more closely at the various durable goods sectors in November, the data were mixed. There were increased sales for primary metals (up 0.8 percent), electrical equipment and appliances (up 0.7 percent) and other durable goods (up 0.3 percent), but orders were lower for machinery (down 1.1 percent), computer and electronic products (down 0.3 percent) and fabricated metal products (down 0.3 percent).
Meanwhile, durable goods shipments increased 1.0 percent in November, but with transportation equipment excluded, shipments rose by 0.2 percent. Much like the new orders data described above, shipments have trended strongly higher over the past year. Since November 2016, durable goods shipments have risen at decent rates, up 6.7 percent, with year-over-year growth of 7.1 percent when transportation equipment shipments were excluded. In addition, shipments of core capital goods have also improved mightily over the past 12 months, up 9.3 percent year-over-year.