New orders for manufactured durable goods in January increased 2.8 percent to $236.1 billion, according to the U.S. Census Bureau. This increase, up following two consecutive monthly decreases, followed a 3.7 percent December decrease.
Excluding transportation, new orders increased 0.3 percent. Excluding defense, new orders decreased 3 percent. Transportation equipment, also up following two consecutive monthly decreases, led the increase, up 9.1 percent to $72.1 billion.
The 2.8 percent increase was due to a more than 9 percent increase in normally volatile transportation equipment demand, according to Cliff Waldman, economist for the MAPI Foundation, the research affiliate of the Manufacturers Alliance for Productivity and Innovation.
“Overall, the January report paints a picture of weakness in durables demand,” says Waldman. “The primary and fabricated metals sectors both saw modest declines in new orders. Machinery equipment orders did have a 1.9 percent increase in January, but this followed a 3.5 percent contraction in December. Further, machinery orders were an alarming 6.7 percent below January 2014.”
Shipments of manufactured durable goods in January, down three of the last four months, decreased 1.1 percent to $245.1 billion. This followed a 1.5 percent December increase. Transportation equipment, down two of the last three months, led the decrease, down 1.7 percent to $73.9 billion.
Unfilled orders for manufactured durable goods in January, down two consecutive months, decreased 0.2 percent to $1,163.4 billion. This followed a 0.9 percent December decrease. Transportation equipment, led the decrease, down 0.3 percent to $736.8 billion.
Inventories of manufactured durable goods in January, up 21 of the last 22 months, increased 0.4 percent to $412.5 billion. This was at the highest level since the series was first published on a NAICS basis in 1992 and followed a 0.5 percent December increase. Transportation equipment led the increase, up 0.5 percent to $134.4 billion.
Nondefense new orders for capital goods in January increased 9.5 percent to $79.8 billion. Shipments increased 1 percent to $80.2 billion. Unfilled orders decreased 0.1 percent to $731.0 billion. Inventories increased 0.1 percent to $186.9 billion.
Defense new orders for capital goods in January decreased 5.2 percent to $7.6 billion. Shipments decreased 12 percent to $9.2 billion. Unfilled orders decreased 1.1 percent to $153.4 billion. Inventories increased 0.7 percent to $24.2 billion.
“The burden of U.S. growth, at least in the short term, is going to remain on the shoulders of the consumer, who is fortunately benefiting from a considerable improvement in the employment picture,” says Waldman. “Business decision makers appear to remain in a very conservative mindset when it comes to capital spending, partially due to global weakness as well as the uncertainties brought about by recent dramatic movements in currency and commodity markets.”
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