From a new orders standpoint, it’s another poor durable goods report.
Advance Report on Durable Goods New Orders and Shipments
Please consider the Advance Report on Durable Goods New Orders and Shipments for December.
New Orders
- New orders for manufactured durable goods in December, down four of the last five months, decreased $6.3 billion or 2.2 percent to $276.1 billion. This followed a 2.0 percent November decrease.
- Excluding transportation, new orders increased 0.3 percent.
- Excluding defense, new orders decreased 2.4 percent.
- Transportation equipment, also down four of the last five months, drove the decrease, $6.9 billion or 7.4 percent to $86.1 billion.
Shipments
- Shipments of manufactured durable goods in December, up following four consecutive monthly decreases, increased $2.6 billion or 0.9 percent to $287.4 billion. This followed a 0.2 percent November decrease.
- Transportation equipment, also up following four consecutive monthly decreases, led the increase, $2.5 billion or 2.8 percent to $93.2 billion.
Unfilled Orders
- Unfilled orders for manufactured durable goods in December, down following five consecutive monthly increases, decreased $6.4 billion or 0.5 percent to $1,396.2 billion. This followed a 0.2 percent November increase.
- Transportation equipment, also down following five consecutive monthly increases, drove the decrease, $7.1 billion or 0.8 percent to $898.6 billion.
Capital Goods
- Nondefense new orders for capital goods in December decreased $6.6 billion or 7.8 percent to $78.2 billion.
- Shipments increased $2.8 billion or 3.5 percent to $85.0 billion.
- Unfilled orders decreased $6.8 billion or 0.8 percent to $841.1 billion.
Revised November Data
- New orders down: $583.7 billion (revised from $586.1 billion);
- Shipments Down: $586.1 billion (revised from $586.3 billion);
- Unfilled Orders Down: $1,402.6 billion (revised from $1,404.8 billion)
- Total Inventories Up: $860.1 billion (revised from $859.3 billion).
Other than the increase in shipments, this was a miserable report.
Durable Goods New Orders Percent Change From a Year Ago
The Census Department notes “Figures are adjusted for seasonality, but not for inflation. Figures on new and unfilled orders exclude data for semiconductor manufacturing.“
Adjusted for inflation, year-over-year new orders are down across the board.
Meanwhile, A Great Tariff Experiment Is On Deck. Trump Repeats Threat of Universal Tariffs.
Good luck with that.
Butte Montana. A good scrubbing and Anaconda rocks again. Is this what is wanted? Tarrifs on crap US doesn’t do anymore? You buy from the lowest cost supplier, right or not?
Trump needs to decide if he wants aluminum or AI data centers, can’t have both. At least, they compete directly for the same pure electicity, his choice apparently.
“What Recession”
Mish, do you follow the GDPNow forecast any more? Another large 3.2% increase for Q4 2024.
That’s 15 quarters of positive real growth under Biden’s administration and Powell’s Fed, except for Q1 2022. Some here will argue it’s a lagging indicator, but it’s been lagging for over 4 years now
Is that you Mark Zandi?
3.2% GDP generated by 6.8% deficit spending?
Not a good trade..
Businesses do not like uncertainty.
Mexican and Canadian steel makers are not taking orders from American buyers, because of tariff uncertainty. This might spread to other industries.
https://financialpost.com/commodities/mining/canada-mexico-steelmakers-refuse-new-us-orders
Then I guess businesses won’t like Trump’s tariffs on Taiwan chips….
https://www.pcmag.com/news/trump-to-tariff-chips-made-in-taiwan-targeting-tsmc
Got PUTS and inflation protection?
No one likes uncertainty, including the American consumer. Runaway inflation for the last 4 years has generated more angst due to its inherent uncertainty-production, triggering a lot of angst undertones in not just businesses but all indidviduals. This subsurface uncertainty isn’t new over the last 9 days but with a new administration it’s on steroids at the moment (as it always is with a new administration, this one particularly greater).
Generation Z born 1995-2012 cannot afford automobiles after government regulations raised the cost to >$40,000. They uber instead. Japanese cars owned by previous generations run dependably for 300,000 miles. EV’s failed on takeoff. Detroit needs another round of bailouts or deregulation and replace the planned obsolescence business plan. Tariffs on European automobiles may help.
When I was a kid in the USA the price for a VW Beetle was $1995, as were the prices of the Ford and Chevy competitors. That was about 1974 IIRC, so ~50 years ago. Honda Civics came along a few years later and were just as cheap.
What young person can afford $40K for a first car? It’s partly inflation of course but also stuffing all cars full of screens and electronic gadgets that break down/wear out and can’t be repaired cheaply. Plus the price of petrol!
“Detroit needs another round of bailouts or deregulation and replace the planned obsolescence business plan”
Didn’t some of theUnions, just get massive longer term contracts? Some stupidly in the EV arena as well? I think any “Bailouts” are long past the Due Date.
I think they would need to “Regulate” to shrink the options and base models. New Sales of Autos, of all kinds, will take a massive hit over the coming Years. Some will vanish, and especially in the EV market. IMHO.
You can get 2024 Nissan Sentras for under $25k. Older used vehicles for less.
It is the result of the economy being run in reverse. The stoppage in the flow of monetary savings (funds held beyond the income period in which they are received, income not spent), which is an inexorable part of time-deposit banking, has a longer-term debilitating effect on demands, particularly the demands for capital goods (CAPEX). -1961
We also have crowding out. It is also the result of outsized financial investment relative to real investment.
Your welcome Mish.
Trump is offering all federal workers a buyout option. They will get full pay until September 30th if they resign before February 6th.
“We’re five years past COVID and just 6% of federal employees work full-time in office.”
I thought I read that everyone had to come back to the office immediately? If true, then all those that didn’t, would not qualify for this deal, correct? FA/FO situation in the making…
I think the deadline for the “return to work” is sometime in March.
Do you ever get the feeling that if these workers, most of whom, before the covid BS, worked at a desk in a gov building, can perform their work from anyplace, maybe really aren’t “essential”?
We will make our pharma. China can produce theirs (ours). We will make an
Iron dome. Iran can do the same once electricity is back online. We can do Apache, but Turkey can’t. Dr SLB can cure Iran and Venezuela if Trump says yes. We can build a riviera in Jasa if they will be nice to the people of the book.
I’m genuinely surprised. It’s not like new washers, dryers, stoves, refrigerators are lasting 30+ years anymore.
No, because circuit boards are integral yet a frequent and expensive point of failure.
Good thing the main physical objects are largely plastic, so society largely views major appliances as disposable. \s
We entered the Gilded Age
Don’t worry, the new golden age of tariffs, labor shortages, inflation and chaos will make everything better.
This is why we need millions of H1Bs!
Trump inherited a total mess Mish. I agree
No he’s making it worse that’s his job and remember when a clown moves into a palace he turns it into a circus.
Donald won’t do worse than his predecessor.
Anybody want to buy a Cybertruck?
Please?
Pretty Please?
I read that Hertz rental is selling their Tesla’s at very low $$. They also have a rent then buy program going for their cars many under $20K