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Durable Goods Orders
Released On 6/24/2009 8:30:00 AM For May, 2009
PriorConsensusConsensus RangeActual
New Orders - M/M change1.9 %-0.5 %-2.0 % to 1.0 %1.8 %
New Orders - Yr/Yr Change-23.3 %
Ex-transportation - M/M0.8 %1.1 %
Ex-transportation - Yr/Yr-22.4 %

Highlights
New factory orders for durables in May came in unexpectedly strong even after discounting transportation. Durable goods orders increased 1.8 percent in May, following a rebound also of 1.8 percent drop in April. The boost in April initially had been estimated to be 1.7 percent. The May gain came in well above the market forecast for a 0.5 percent decline. Excluding the transportation component, new durables orders posted a 1.1 percent boost after rising 0.4 percent the month before.

The rebound in new orders was widespread but was led by machinery, up 7.7 percent, and transportation, up 3.6 percent. Also making gains were primary metals, and computers & electronics. Declines were seen in fabricated metals, communication equipment, electrical equipment, and "other."

Another sign of optimism was that capital goods orders rebounded. Orders for nondefense capital goods jumped 10.0 percent in May after a 2.9 percent dip the month before. Even excluding aircraft, nondefense capital goods orders rose 4.8 percent after a 2.9 percent drop in April

Year-on-year, overall new orders for durable goods improved slightly to down 23.3 percent in May from down 24.5 percent the previous month. Excluding transportation, new durables orders rose to down 22.4 percent from down 23.6 percent in April.

The May report on durables orders showed broad-based strength for new orders. While the gain in new orders will take a little time to impact production, the latest numbers add to the argument that the recession's bottom is near. This still does not change the likely fact that the recovery will be sluggish. Nonetheless, equities should like today's numbers. Treasury yields firmed on the news.

Market Consensus before announcement
Durable goods orders rebounded a revised 1.7 percent in April, following a 2.2 percent drop in March. Excluding the transportation component, new durables orders gained a revised 0.4 percent after declining 2.8 percent the month before. The rebound in new orders was broad-based. Manufacturing surveys have been mixed on new orders. The ISM new orders index crossed into positive territory in May, rising to 51.1 from 47.2 the month before. New orders indexes for the Philly Fed and New York Fed have been improving but remained just below break even in May and June.

Definition
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.  Why Investors Care
 
[Chart]
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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