2017 Economic Calendar
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Durable Goods Orders  
Released On 9/27/2017 8:30:00 AM For Aug, 2017
PriorPrior RevisedConsensusConsensus RangeActual
New Orders - M/M change-6.8 %1.5 %0.4 % to 3.5 %1.7 %
New Orders - Yr/Yr Change4.2 %4.0 %5.1 %
Ex-transportation - M/M0.5 %0.8 %0.4 %-0.2 % to 0.7 %0.2 %
Ex-transportation - Yr/Yr5.6 %5.8 %6.1 %
Core capital goods - M/M change0.4 %1.1 %0.3 %0.3 % to 0.5 %0.9 %
Core capital goods - Yr/Yr3.5 %4.1 %3.6 %

A second straight jump in capital goods leads what is a mostly very strong durable goods report where the August headline rose 1.7 percent. This is only slightly above expectations but not core capital goods (nondefense ex-aircraft) which jumped 0.9 percent vs Econoday's consensus for a 0.3 percent gain. This together with a second straight jump in shipments of core capital goods, up 0.7 percent in August, point to business confidence and strengthening business investment and will significantly lift estimates for second-half nonresidential investment.

The headline gain reflects a monthly upswing in civilian aircraft orders, up 45 percent in August following a drop of 71 percent and a surge of 129 percent in the prior two months. Excluding transportation, the report's strength fades, up only 0.2 percent which is half the expected gain. Weakness here is in defense capital goods which fell 9.4 percent but following July's 15.3 percent jump. Other declines include fabricated metals (down 0.4 percent), computers (down 2.3 percent), and electrical equipment (down 0.1 percent).

But there's more good news than bad news including motor vehicles which had been weakening but now show a 1.5 percent August gain for orders and a 1.9 percent rise in shipments. Communications equipment also jumped with orders up 4.0 percent. Other readings include a moderate 0.3 percent rise for both total shipments and inventories that keeps the inventory-to-shipments ratio steady at a lean and constructive 1.69. Unfilled orders did not show improvement, unchanged following July's 0.3 percent decline.

The factory sector did not show any initial effects from Hurricane Harvey's late August hit and, assuming Hurricane Irma's effects proves as slight in September, appears poised for solid year-end acceleration centered in capital goods. The one missing piece in the factory sector, however, is manufacturing production as measured by the Federal Reserve which has remained stubbornly weak including a 0.3 percent fall in the report for August. Note that revisions in today's report are minor compared to the factory orders report when capital goods data from the July advance durables report were sharply upgraded.

Consensus Outlook
Strength for core capital goods, both in orders and shipments, has been the key highlight of recent durable goods reports where aircraft-distorted headlines have otherwise made the report hard to read. A negative in the report has been weakness in vehicle readings, one consistent with weakness in underlying consumer sales and very apparent in the separate monthly report on industrial production. August durable goods orders are seen bouncing back from July's 6.8 percent plunge with a 1.5 percent gain in August. Ex-transportation orders are expected to climb 0.4 percent on top of July's 0.5 percent gain while the call for core capital goods orders (nondefense ex-aircraft) is a gain of 0.3 percent following a 0.4 percent increase in July.

Durable goods orders reflect the new orders placed with domestic manufacturers for immediate and future delivery of factory hard goods. The first release, the advance, provides an early estimate of durable goods orders. About two weeks later, more complete and revised data are available in the factory orders report. The data for the previous month are usually revised a second time upon the release of the new month's data.

Durable goods orders are available nationally by both industry and market categories. A new order is accompanied by a legally binding agreement to purchase for immediate or future delivery. Advance durable goods orders no longer include data on semiconductors since semiconductor manufacturers stopped releasing this information to the Census Bureau.

The advance durable goods report also contains information on shipments, unfilled orders and inventories. Shipments represent deliveries made, valued at net selling price after discounts and allowances, excluding freight charges and excise taxes. Unfilled orders are those received but not yet delivered.

In 2001, the Census Bureau shifted from the standard industrial classification (SIC) system to the North American Industrial Classification System (NAICS). This caused some realignment of major industry classifications. Given the significant revisions incurred, the historical data now begin in 1992.
 Why Investors Care
Monthly fluctuations in durable goods orders are frequent and large and skew the underlying trend in the data. In fact, even the yearly change must be viewed carefully because of the volatility in this series.
Data Source: Haver Analytics

2017 Release Schedule
Released On: 1/272/273/244/275/266/267/278/259/2710/2511/2212/22
Release For: DecJanFebMarAprMayJunJulAugSepOctNov

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