According to US Census, durable goods new orders are down in February 2011. Econintersect’s analysis is that durable goods are less good – but still up YoY.
New Orders. New orders for manufactured durable goods in February decreased $1.9 billion or 0.9 percent to $200.0 billion, the U.S. Census Bureau announced today. This decrease, down four of the last five months, followed a 3.6 percent January increase. Excluding transportation, new orders decreased 0.6 percent. Excluding defense, new orders increased 0.4 percent. Machinery, down two consecutive months, had the largest decrease, $1.2 billion or 4.2 percent to $26.6 billion.
Shipments. Shipments of manufactured durable goods in February, up five of the last six months, increased $0.7 billion or 0.3 percent to $203.2 billion. This followed a 0.2 percent January increase. Machinery, up three of the last four months, had the largest increase, $0.7 billion or 2.6 percent to $26.1 billion.
Unfilled Orders. Unfilled orders for manufactured durable goods in February, up ten of the last eleven months, increased $2.9 billion or 0.4 percent to $833.7 billion. This followed a 0.7 percent January increase. Transportation equipment, up two consecutive months, had the largest increase, $1.1 billion or 0.2 percent to $477.3 billion.
Inventories. Inventories of manufactured durable goods in February, up fourteen consecutive months, increased $2.9 billion or 0.9 percent to $328.3 billion. This followed a 0.9 percent January increase. Transportation equipment, also up fourteen consecutive months, had the largest increase, $0.8 billion or 0.9 percent to $87.8 billion.
Econintersect evaluates based on unadjusted data. Seasonal adjustment factors are suspect due to the economic disruption caused by the Great Recession. However, as long as durable goods continues to improve YoY, it is really hard to argue that the durable goods sector is not improving.
There is no question that durable goods improvements have been trending less good for the last 10 months – but the important point to recognize is that durable goods is being compared to stronger and stronger YoY durable goods new orders. Thus, the second derivative (acceleration) is negative, but the first derivative (velocity) is still positive.
An area of significant weakness in the data was defense new orders, down 10% YoY. I suspect this will remain a headwind to durable goods new orders for the foreseeable future as government spending for defense is likely to continue being cut.
Inventories remained within historical ranges, but were up 10.3% YoY against a sales increase of 7.6% YoY.
Overall, Econintersect views this data are relatively good.
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