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Durable Goods Orders  
Released On 4/24/2009 8:30:00 AM For Mar, 2009
PriorConsensusConsensus RangeActual
New Orders - M/M change3.4 %-1.8 %-4.9 % to 1.0 %-0.8 %
New Orders - Yr/Yr Change-23.4 %-25.2 %
Ex-transportation - M/M3.9 %-0.6 %
Ex-transportation - Yr/Yr-16.2 %-20.3 %

Durable goods orders in March declined less than expected but February's sharp gains were whittled down substantially in revisions. Durable goods orders fell back 0.8 percent in March, following a 2.1 percent rebound in February. The prior month's increase originally had been estimated at 3.5 percent. However, the drop in March was not as severe as the market forecast for a 1.8 percent fall. Excluding the transportation component, new orders decreased 0.6 percent, after advancing 2.0 percent in February.

Weakness in new orders was widespread in the latest month but was led by communication equipment, down 8.1 percent, and primary metals, down 3.2 percent. The only major industry group to post a gain was electrical equipment & appliances which rebounded 1.8 percent.

By special category, nondefense capital goods rose for the second consecutive month, increasing 1.9 percent in March after a 4.9 percent boost the prior month. But these orders are still recovering from January's sharp 9.9 percent plunge.

Year-on-year, overall new orders for durable goods slipped to down 25.2 percent in March from down 24.8 percent in February. Excluding transportation, new durables orders declined to down 20.3 percent from down 18.3 percent the prior month.

The latest durables report showed a partial pullback in durables orders but over the past two months there has been a net gain. Overall, the numbers indicate that contraction in manufacturing may be slowing – which still is good news. The "may" part has to be heavily considered since durables orders are notoriously volatile. Also, we certainly will have to pay more attention over the next few months to ex-transportation since auto manufacturers are shutting down some assembly lines due to weak sales and high inventories.

Consensus Outlook
Durable goods orders rebounded a revised 3.5 percent in February after falling 7.8 percent in January. The rise in durables showed wide gains across components though against easy comparisons with very weak January data. Looking ahead, we are likely to see slippage for March. The new orders indexes in the latest manufacturing surveys for ISM, Philly Fed, and New York Fed improved but remained in negative territory.

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

2009 Release Schedule
Released On: 1/292/263/254/245/286/247/298/269/2510/2811/2512/24
Release For: DecJanFebMarAprMayJunJulAugSepOctNov

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