042616 Durable Goods

As shown above, durable goods orders and shipments reported in the US Census’ Advance Manufacturers’ Sales, New Orders, and Inventories report bounced somewhat over the last three months.  This month’s report missed headline estimates for MoM gains.  Headline durable goods were expected to rise 1.9% after a 3.0% decline in February, but were only up 78 bps.  Ex Transportation, instead of a 50 bps rise as expected, orders were down 24 bps.  Our measure of “core” durable goods orders declined 94 bps MoM; this measure strips out volatile series like Defense, and that made a big difference this month.  Defense aircraft orders are only 2.7% of total orders but their 65.66% gain MoM added 1.74% to total orders MoM.  The one caveat is seasonality; as shown below, when Easter falls in March there tend to be large declines in Durable Goods Orders & Shipments (which feed into GDP tracking, and “Core” Durable Goods Orders/Shipments.  In The Closer tonight, we will investigate what that could mean for April, and we break down the details of this month’s report further.

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042616 Durable Goods 2

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