Durable Goods Orders Grow 1.9% in August

(Positive) Real durable goods new orders in August 2016 were $230,280 million. Compared with one year ago, durable goods new orders grew 1.9 percent, which marks the third time in five months that orders have increased compared with one year ago. However, the two months that orders didn't grow both contracted 7.1 percent. The annual rate of change, now -1.1 percent, contracted at a slower rate for the second month in a row and contracted at the slowest rate since it began contracting in July 2015. 

After one month of contraction, motor vehicle and parts orders increased 4.8 percent compared with one year ago. That was the fastest growth since February. The annual rate of growth has decelerated to its slowest rate of growth since May 2010, which was the last time the annual rate of change contracted. 

Aerospace orders decreased in August 32.7 percent compared with one year ago. That was the third straight month of contraction of more than 22 percent. Also, it was the fifth time in seven months that aerospace orders contracted. The annual rate of contraction decelerated dramatically in August but looks like it will contract faster very soon.

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