Durable Goods New Orders Up 3% in December

New orders for manufactured durable goods in December increased $6.2 billion or 3.0 percent to $214.5 billion, according to an advance release from the U.S. Census Bureau. This increase, up five of the last six months, followed a 4.3 percent November increase.

Excluding transportation, new orders increased 2.1 percent. Excluding defense, new orders increased 3.5 percent. Transportation equipment, up two consecutive months, had the largest increase, $3.0 billion or 5.5 percent to $58.4 billion. This was due to nondefense aircraft and parts, which increased $3.1 billion.

"The sharp positive turn in equipment spending during December might very well have been motivated by concerns about the expiration of equipment expensing provisions," says Cliff Waldman, economist for the Manufacturers Alliance for Productivity and Innovation (MAPI). "But the tenor of the December report was positive overall for U.S. manufacturing strength, with strong gains in such sectors as machinery and primary metals. However, given the spate of data-distorting events that occurred during 2011, from the Japanese earthquake to unnerving fights over the U.S. debt ceiling, the December numbers are not necessarily indicative of a sea change in the U.S. outlook, especially in light of clear evidence of widespread slowing in global growth. The most likely forecast for U.S. manufacturing is for positive but moderating output growth."

Shipments of manufactured durable goods in December, up two of the last three months, increased $4.3 billion or 2.1 percent to $207.3 billion. This followed a 0.3 percent November decrease. Primary metals, up seventeen of the last eighteen months, had the largest increase, $2.2 billion or 8.2 percent to $29.0 billion. This was at the highest level since the series was first published on a NAICS basis in 1992 and followed a 5.0 percent November increase.

Unfilled orders for manufactured durable goods in December, up twenty of the last twenty one months, increased $13.1 billion or 1.5 percent to $912.3 billion. This followed a 1.4 percent November increase. Transportation equipment, up eleven of the last twelve months, had the largest increase, $10.6 billion or 2.1 percent to $529.7 billion.

Inventories of manufactured durable goods in December, up twenty four consecutive months, increased $1.2 billion or 0.3 percent to $370.1 billion. This was at the highest level since the series was first published on a NAICS basis and followed a 0.6 percent November increase. Transportation equipment, also up twenty four consecutive months, had the largest increase, $1.7 billion or 1.5 percent to $116.4 billion.

Nondefense new orders for capital goods in December increased $4.6 billion or 5.8 percent to $84.4 billion. Shipments increased $1.8 billion or 2.6 percent to $71.5 billion. Unfilled orders increased $12.9 billion or 2.4 percent to $545.6 billion. Inventories increased $1.0 billion or 0.6 percent to $170.6 billion.

Defense new orders for capital goods in December decreased $0.8 billion or 12.4 percent to $5.3 billion. Shipments increased $0.6 billion or 8.9 percent to $7.6 billion. Unfilled orders decreased $2.2 billion or 1.5 percent to $149.0 billion. Inventories decreased $0.6 billion or 2.7 percent to $20.0 billion.

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