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The often volatile Advance Durable Goods report from the Census Department again has some details worth a close look.

New Orders

New orders for manufactured durable goods in December increased $5.7 billion or 2.4 percent to $245.5 billion, the U.S. Census Bureau announced today. This increase, up two of the last three months, followed a 3.1 percent November decrease. Excluding transportation, new orders decreased 0.1 percent. Excluding defense, new orders decreased 2.5 percent. Transportation equipment, up following three consecutive monthly decreases, drove the increase, $5.9 billion or 7.6 percent to $82.9 billion.

Shipments

Shipments of manufactured durable goods in December, down six consecutive months, decreased $0.5 billion or 0.2 percent to $250.4 billion. This followed a 0.1 percent November decrease. Transportation equipment, also down six consecutive months, led the decrease, $0.4 billion or 0.4 percent to $83.2 billion.

Unfilled Orders

Unfilled orders for manufactured durable goods in December, down three of the last four months, decreased $0.8 billion or 0.1 percent to $1,156.0 billion. This followed a 0.6 percent November decrease. Machinery, down fourteen consecutive months, led the decrease, $0.5 billion or 0.5 percent to $101.6 billion.

Inventories

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Inventories of manufactured durable goods in December, up seventeen of the last eighteen months, increased $2.2 billion or 0.5 percent to $436.0 billion. This followed a 0.4 percent November increase. Transportation equipment, also up seventeen of the last eighteen months, led the increase, $1.7 billion or 1.2 percent to $151.2 billion.

Capital Goods

Nondefense new orders for capital goods in December decreased $4.5 billion or 6.5 percent to $64.5 billion. Shipments increased $0.4 billion or 0.5 percent to $74.8 billion. Unfilled orders decreased $10.3 billion or 1.5 percent to $671.6 billion. Inventories increased $2.2 billion or 1.1 percent to $199.2 billion. Defense new orders for capital goods in December increased $9.1 billion or 90.2 percent to $19.2 billion. Shipments decreased $0.3 billion or 2.5 percent to $12.4 billion. Unfilled orders increased $6.8 billion or 4.3 percent to $165.0 billion. Inventories decreased $0.3 billion or 1.3 percent to $24.0 billion.

Five Key Points

  1. Excluding defense, new durable goods orders decreased 2.5 percent.
  2. Shipments, which feed GDP estimates, were down six consecutive months.
  3. Unfilled orders for manufactured durable goods are down three of the last four months. Unfilled orders are an indication of future hiring.
  4. Transportation equipment inventories are up seventeen of the last eighteen months. Think Boeing.
  5. Nondefense new orders for capital goods in December decreased $4.5 billion or 6.5 percent. These are considered "core capital goods", an indicator of future expansion.

Defense spending is one thing propping up the economy.

But +2.4% sure is a beautiful headline number.

Mike "Mish" Shedlock