Durable Goods Orders Contract 3rd Time in 4 Months

(Neutral) Real durable goods new orders in March 2016 were $254,016 million. Compared with one year ago, durable goods new orders were down 1.4 percent, which marks the third time in four months that orders have contracted. As a result, the annual rate of change, now -4.0 percent, has contracted at 4.0 percent or more for six of the seven last seven months. The rate of contraction may slow in the upcoming months, but the monthly data has not been improving enough to cause durable goods orders to grow year over year.

Motor vehicle and parts orders increased at a rate of 4.2 percent compared with one year ago. That was the 16th straight month that MV&P orders increased. The annual rate of change has been relatively constant between 7.5 and 8.5 percent for five months.

Aerospace orders decreased 25.8 percent compared with one year ago. They have contracted in three of the last four months. The annual rate of change has contracted at a slower rate in 2016 than it did in the second half of 2015 though. So, other than the last two months, there was a somewhat positive trend in aerospace orders.

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