Durable goods orders down 4.5%, double expectations
Economists had expected the durable goods report for August 2008 to be weak, but the report showing durable goods orders down 4.5% was much weaker than expected.
While I do believe that the United States is in recession and the durable goods report is considered a key indicator of future manufacturing activity, I do not put that much weight in one report. The durable goods report is notoriously volatile from month to month and we can expect major revisions going forward.
Nevertheless, we should be cognizant that most of the economic data being released for the third quarter points to a very weak economic environment.
New Orders
New orders for manufactured durable goods in August decreased $9.9 billion or 4.5 percent to $208.5 billion, the U.S. Census Bureau announced today. This was the largest percent decrease in new orders since January 2008 and followed three consecutive monthly increases including a 0.8 percent July increase. Excluding transportation, new orders decreased 3.0 percent. Excluding defense, new orders decreased 5.0 percent.
Shipments
Shipments of manufactured durable goods in August, down following two consecutive monthly increases, decreased $7.7 billion or 3.5 percent to $210.1 billion. This was the largest percent decrease in shipments since December 2002 and followed a 2.3 percent July increase.
Unfilled Orders
Unfilled orders for manufactured durable goods in August, up thirty of the last thirty-one months, increased $3.0 billion or 0.4 percent to $827.2 billion. This was at the highest level since the series was first stated on a NAICS basis in 1992 and followed a 0.8 percent July increase.
Inventories
Inventories of manufactured durable goods in August, up thirteen of the last fourteen months, increased $2.4 billion or 0.7 percent to $338.5 billion. This was also at the highest level since the series was first stated on a NAICS basis in 1992 and followed a 0.9 percent July increase.
Capital Goods Industries
Nondefense
Nondefense new orders for capital goods in August decreased $5.6 billion or 7.5 percent to $68.9 billion.
Defense
Defense new orders for capital goods in August increased $0.9 billion or 9.4 percent to $9.9 billion.
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