Durables orders made a nice comeback in January but there is a lot in the detail.

Durables orders in January rebounded 2.7 percent, following a revised -0.4

percent dip in December (previously estimated at down 2.3 percent).

Excluding transportation, new orders for durable goods fell back, declining

3.6 percent after a 3.0 percent rise in December and 4.6 percent boost in

November. The headline number looks very good for January but a key

question is whether ex-transportation offsets that. Basically, the ex-transportation

decrease followed two strong months, meaning the decline is not so disconcerting.

Durables manufacturing continues on a moderate uptrend.

Market Consensus Before Announcement


Durable goods orders unexpectedly dropped a revised 2.3 percent,

following a 0.1 percent dip the month before. Weakness was primarily

in nondefense aircraft orders. Excluding transportation, new orders for

durable goods were more favorable, advancing 0.5 percent after a

4.5 percent surge in November. The headline number was tugged

down by the transportation component which fell a monthly 12.8 percent

in December after declining 13.1 percent the month before.

The latest decrease was mainly in nondefense aircraft.

Definition


Durable goods orders reflect the new orders placed with domestic

manufacturers for immediate and future delivery of factory hard goods.

The first release, the advance, provides an early estimate of durable

goods orders. About two weeks later, more complete and revised data

are available in the factory orders report. The data for the previous

month are usually revised a second time upon the release of the new month’s data.

[Chart]

Data Source: Haver Analytics

©Copyright 1998-2011 Econoday, Inc.


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