Advance August 2010 unadjusted data from the Census Bureau shows durable goods orders did improve MoM. But that was because July data was so bad. Taken in context, improvement YoY is “less good” then earlier this year. The press release in part:
New Orders. New orders for manufactured durable goods in August decreased $2.5 billion or 1.3 percent to $191.1 billion, the U.S. Census Bureau announced today. Down three of the last four months this decrease followed a 0.7 percent July increase. Excluding transportation, new orders increased 2.0 percent. Excluding defense, new orders decreased 1.2 percent. Transportation equipment, also down three of the last four months, had the largest decrease, $5.3 billion or 10.3 percent to $46.6 billion. This was due to nondefense aircraft and parts, which decreased $3.6 billion.
Shipments. Shipments of manufactured durable goods in August, down following two consecutive monthly increases, decreased $3.1 billion or 1.5 percent to $197.9 billion. This followed a 2.5 percent July increase. Transportation equipment, also down following two consecutive monthly increases, decreased $3.1 billion or 5.9 percent to $49.5 billion.
Unfilled Orders. Unfilled orders for manufactured durable goods in August, down two consecutive months, decreased $0.8 billion or 0.1 percent to $802.4 billion. This followed a 0.1 percent July decrease. Transportation equipment, down following four consecutive months, had the largest decrease, $3.0 billion or 0.6 percent to $473.1 billion.
Inventories. Inventories of manufactured durable goods in August, up eight consecutive months, increased $1.3 billion or 0.4 percent to $312.4 billion. This followed a 0.6 percent July increase. Transportation equipment, up eight consecutive months, had the largest increase, $0.6 billion or 0.7 percent to $80.9 billion.
Capital Goods. Nondefense new orders for capital goods in August decreased $0.6 billion or 0.9 percent to $64.9 billion. Shipments decreased $0.2 billion or 0.3 percent to $65.5 billion. Unfilled orders decreased $0.5 billion or 0.1 percent to $487.2 billion. Inventories increased $1.1 billion or 0.8 percent to $130.8 billion. Defense new orders for capital goods in August decreased $0.1 billion or 1.5 percent to $9.4 billion. Shipments decreased $0.4 billion or 4.2 percent to $9.2 billion. Unfilled orders increased $0.2 billion or 0.1 percent to $139.8 billion. Inventories decreased $0.3 billion or 1.9 percent to $17.6 billion.
Revised July Data. Revised seasonally adjusted July figures for all manufacturing industries were: new orders, $410.0 billion (revised from $409.5 billion); shipments, $417.4 billion (revised from $417.1 billion); unfilled orders, $803.2 billion (revised from $802.8 billion); and total inventories, $525.8 billion (revised from $526.0 billion).
First some caveats. This is advance data – it is derived from extrapolated sampling. Hard data in the past has been noisy. Secondly, this is an Old Normal indicator when new home construction drove the economy – and it is just a portion of manufacturing which has overall been weak.
Econintersect normally does not break new order data down – but for this release we have focused on new orders less transport sector because some are celebrating the growth MoM. While the growth MoM is true, it is due to such a poor July 2010. If we ignore July 2010, the trend is definitely towards “less good” – and confirmation of Econintersect’s low growth economic forecasts.
Unfilled orders continues to decline. This continues to confirm overcapacity and more layoffs to come.