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First Cut: January new orders for durables up modestly, and up three months in a row

New orders for durable goods rose 0.4% in January from February, and was up for a third month in a row. Activity continued to be supported largely by transportation orders. New orders excluding transportation dipped 0.1%. Transportation was up 1.2% on orders for nondefense aircraft (up 15.9%) and defense aircraft up 4.5%).

Aircraft orders can provide some big swings in the data. Boeing reported 218 new orders in December, some of which was probably not booked until January. January had 46 new orders, a sharp drop normal at this time of year and well anticipated by seasonal adjustment factors. Going into February, Boeing had 5 new orders, mainly in defense aircraft related to the Aero India expo (February 20-24).

However, “core” new orders — new orders less civilian aircraft capital goods and defense capital goods — edged down 0.1% in January. The decline is quite small and this calculation typically alternates between firmer and softer months. The January reading was in line with this.

Overall, new orders for durables appear to be maintaining a modest pace of increases consistent with slower economic growth.

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