The advance report for new durable goods orders in December was about as expected with a 1.2% increase driven by nondefense aircraft orders. The transportation component was up 3.3% with nondefense aircraft soaring 28.4%, while defense aircraft were down 30.5%. Orders for motor vehicles were up 2.1% in December. Excluding transportation, orders showed a scan gain of 0.1%. The small change reflects conditions reported in many surveys of manufacturing that indicated December experienced an abrupt slowing in conditions, although January surveys point to some rebound.
Categories other than transportation were generally down-to-only meager increases. It should be noted that new orders in combination with unfilled orders were up 1.1%, suggesting that there is plenty of backlog to keep underlying activity positive for a while yet even if the manufacturing sector resets to a more moderate pace after a hectic 2018 as a whole.
Strong nondefense aircraft orders were in line with the burst of 218 bookings reported by Boeing for December, up 167 from November. In January, aircraft orders were considerably lower. Seasonal adjustment will anticipate that, but the lower level will mean no support to overall orders from transportation.
“Core” durables orders – new orders less civilian aircraft capital goods and defense capital goods – continued it pattern of alternating slower and firmer months. December showed a modest increase of 0.3% after the dip of 0.3% in November.
The Census Bureau did not announce a new release date for the January advance report on durable goods but indicated it would be updating its calendar soon.
Disclaimer: Whetstone Analysis provides commentary as a service to its subscribers. Whetstone Analysis is not responsible for, and expressly disclaims all liability for, damages of any kind arising out of use, reference to, or reliance on any information contained within the site. While the information contained within the site is periodically updated and every effort is made to ensure its accuracy, no guarantee is given that the information provided in this Web site is correct, complete, and up-to-date. Click here to read our full Disclaimer.