New orders for manufactured durable goods in October increased slightly to $216.9 billion, the U.S. Census Bureau announced today. This increase, up five of the last six months, followed a 9.2 percent September increase. Excluding transportation, new orders increased 1.5 percent. Excluding defense, new orders increased 0.1 percent.
Machinery, up two consecutive months, had the largest increase, $0.9 billion or 2.9 percent to $30.9 billion.
Let's look at the internals and see what's in there.
Focusing on new orders, computers were down 9.3% -- but communications were up 11.4%, and had a 9.5% shipment increase as well. This follows two weak months. However, two of the three months have been net negative for both computers and comms on a shipments basis, so it's difficult to look at something that oscillates but has a net-negative trend as "good."
One good bit of news is that primary metals looks to be reaosnably stable, which is a good thing. But ex-defense new orders were only up 0.1% and both aircraft (which is extremely volatile) and vehicles (much less so) were negative. Motor vehicles have now put in a three-month negative set of figures for both shipments and orders -- and that's not good, considering that vehicles have been one of the "drivers" of so-called "economic recovery" thus far.
Non-itemized (other than the listed durables) were flat in both shipments and new orders.
What to make of this? It's a report that shows no trend, other than the clear loss of momentum in vehicle sales and orders.
On-balance I read this as showing no trend externally and unlike the media pumpers who were immediately grasping at straws in the communications figures, the typical volatility in that subset of the series and the 2-of-3 month decrease says that you should not be sanguine in that regard. Arguably the worst indicator on a forward basis, which tends to filter into employment trends (virtually every employee these days needs a computer of some sort), is the computer equipment number annualized, which is off ~10% for both shipments and orders.
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