Durable Goods Orders Drop 2.4% in December

Real durable goods new orders in December 2015 were $241,150 million. Compared with one year ago, durable goods new orders were down 2.4 percent. Following one month of increase in November, December was the 10th time in 11 months that durable goods orders contracted. As a result, the annual rate of change, now -4.6 percent, contracted at an accelerating rate. However, the annual rate of change has been relatively constant for four months.

Motor vehicle and parts orders increased a 4.1 percent from one year ago. That was the 13th straight month that MV&P orders increased. However, the annual rate of change grew at a decelerating rate for for the first time since July 2015. It looks like the decelerating growth trend will continue in the upcoming months. 

Aerospace orders contracted 2.3 percent compared with one year ago. That was the first month of contraction since September 2015. Annually, aerospace orders contracted at a decelerating rate for the fourth consecutive month. The current contraction is mostly due to a single, extremely large month of orders in July 2014. This positive trend in aerospace orders should continue in upcoming months.

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