Economic News Blog
Posted by: Steven Kline, Jr. 6. June 2016

Durable Goods Orders Increase Two of Last Three Months

(Positive) Real durable goods new orders in April 2016 were $228,527 million. Compared with one year ago, durable goods new orders were up1.2 percent, which marks the second time in three months that orders have increase compared with one year ago. This comes after a period when orders contracted 10 of 12 months. As a result, the annual rate of change, now -3.1 percent, has reached its slowest of contraction since it began contracting in July 2015. The rate of contraction is likely to continue to decelerate in the upcoming months.

Motor vehicle and parts orders increased at a rate of 1.7 percent compared with one year ago. That was the 17th straight month that MV&P orders increased. However, it was the slowest rate of month-over-month growth since orders contracted in November 2014. The annual rate of growth has decelerated to its slowest rate of growth since May 2014. If there is going to be an improvement in overall durable goods orders, then other industries will need to start picking up the slack in MV&P orders.

After decreasing 26.6 percent last month, aerospace orders inccreased 27.2 percent in April compared with one year ago. This was the fifth time in seven months that aerospace orders increased. In three of those months the rate of growth was more than 22 percent. The annual rate of change has slowed contracted at a significantly slower rate as a result. One reason the annual rate is still contracting was the abnormally large order total from July 2014, which is significantly impacting the annual rate of change at the moment.

We use real durable goods new orders to forecast activity in metalcutting job shopsmetalworking, and durable goods.

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