Advance Durable Goods Rise Unexpectedly for January, Beating Forecast

Durable goods orders in the U.S. rose unexpectedly $0.9 billion in January, or 0.4% to $255.3 billion, easily beating the consensus forecast. Core-durable goods also beat the mark, rising 0.8%.

Durable goods do not need to be purchased frequently because they are designed to last for three years or more.

The consensus forecast was calling for a -0.6% decline, ranging from a low of -3.0% to a high of 1.8%. For the core, consensus forecast was calling for a 0.1 gain, ranging from a low of 0.0% to a high of 0.5%.

“There is nothing not to like in the Durable goods report,” Tim Anderson, analyst at TJM Investments said. “I interpret non-defense capital goods as being CapEx spending by industrial manufacturers.”

“New orders are a leading indicator. Shipments are a lagging indicator.”

Unfilled Orders

Unfilled goods orders for manufactured durable goods were up after three consecutive declines, rising $1.4 billion or 0.1% to $1,181.9 billion. It followed a 0.1% decrease in December.

Transportation equipment was also up after three straightly monthly decreases, leading the charge with a $0.9 billion gain, or 0.1% to $811.6 billion.

Inventories

Inventories of manufactured durable goods have been up twenty‐four of the last twenty‐five months, and gained $1.7 billion or 0.4% to $417.0 billion in January. That follows a 0.3% December increase.

Transportation equipment have been up four of the last five months, and also led the way by gaining $1.2 billion, or 0.9% to $132.6 billion.

Capital Goods

Non-defense new orders for capital goods in rose $2.0 billion or 2.5% to $80.3 billion in January. Shipments decreased $1.3 billion or 1.6% to $78.4 billion.

Unfilled orders gained $1.9 billion or 0.3% to $711.0 billion. Inventories rose $0.9 billion or 0.5% to $182.8 billion.

Defense new orders for capital goods decreased $0.3 billion or 2.3% to $12.5 billion.

Shipments increased $0.4 billion or 3.4% to $13.0 billion. Unfilled orders decreased $0.5 billion or 0.3% to $156.0 billion, while inventories gained $0.4 billion or 1.6% to $23.0 billion.

Revisions

Revised seasonally adjusted December figures for all manufacturing industries were as follows:

• new orders, $500.1 billion (revised from $499.9 billion);
• shipments, $504.9 billion (unchanged);
• unfilled orders, $1,180.5 billion (revised from $1,180.3 billion) and
• total inventories, $681.8 billion (revised from $681.5 billion).