According to the US Census, the advanced data released for durable goods shows new orders for durable good declined in October 2010. The headline:
New orders for manufactured durable goods in October decreased $6.8 billion or 3.3 percent to $196.0 billion, the U.S. Census Bureau announced today. This decrease, down two of the last three months, followed a 5.0 percent September increase. Excluding transportation, new orders decreased 2.7 percent. Excluding defense, new orders decreased 2.1 percent. Transportation equipment, also down two of the last three months, had the largest decrease, $2.9 billion or 5.2 percent to $52.3 billion. This was led by defense aircraft and parts, which decreased $1.6 billion.
Shipments of manufactured durable goods in October, also down two of the last three months, decreased $1.8 billion or 0.9 percent to $196.8 billion. This followed a 0.1 percent September increase. Machinery, down following two consecutive monthly increases, had the largest decrease, $0.9 billion or 3.6 percent to $24.6 billion.
Unfilled orders for manufactured durable goods in October, up nine of the last ten months, increased $5.4 billion or 0.7 percent to $821.9 billion. This followed a 1.4 percent September increase. Transportation equipment, up two consecutive months, had the largest increase, $3.7 billion or 0.8 percent to $484.2 billion.
Inventories of manufactured durable goods in October, up ten consecutive months, increased $1.3 billion or 0.4 percent to $316.7 billion. This followed a 0.7 percent September increase. Machinery, up eight consecutive months, had the largest increase, $0.4 billion or 0.7 percent to $52.4 billion.
Durable goods are a subset of manufactured products that can be used for several years such as refrigerators, airplanes and cars.
Econintersect continues to observe that the quantitative methods being used to create the seasonally adjusted data have been corrupted by the data within the Great Recession and the recovery. Econintersect evaluates unadjusted data.
Viewing the above raw data, it is obvious that comparing 2007 and 2009 to 2010 data – October looks less good than September – but comparing to 2006 and 2008 the comparison reverses. The point being it is not really clear that the seasonally of the data is showing October’s durable goods contracted.
But what we can conclude is that there is a general trend in the YoY data – new orders are becoming less good YoY.
Durable goods unadjusted unfilled orders continue to trend up signifying to me that this sector is healthy. However, to date – the overall trend in manufacturing is showing contraction in unfilled orders.
The surprises in the new orders data show computers / electronics and defense aircraft / parts contracting over 20% MoM. There were no upside surprises in the data.