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Durable Goods Orders  
Released On 11/25/2009 8:30:00 AM For Oct, 2009
PriorConsensusConsensus RangeActual
New Orders - M/M change1.0 %0.5 %0.1 % to 1.5 %-0.6 %
New Orders - Yr/Yr Change-19.6 %-11.9 %
Ex-transportation - M/M0.9 %-1.3 %
Ex-transportation - Yr/Yr-16.9 %-11.3 %

The outlook for manufacturing cooled a bit in October. New orders for durable goods in October fell 0.6 percent, after a revised 2.0 percent rebound in September. The drop in October was well below the market forecast for a 0.5 percent boost. Excluding the transportation component, new durables orders fell 1.3 percent, following a 1.8 percent jump in September.

The drop in new orders was led by machinery which fell a monthly 8.0 percent, followed by a 2.1 percent decrease in computers & electronics. Also declining were communications equipment and "other" durables. Partially offsetting were gains in primary metals, fabricated metals, electrical equipment, and transportation.

New orders for capital equipment continued to rebound from a drop in August with the gain due to aircraft. New orders for nondefense capital goods rose 1.2 percent in October after an increase of 3.2 percent the month before. These orders had dropped 7.8 percent in August. Excluding aircraft, new orders for nondefense capital goods fell 2.9 percent after a 2.6 percent rebound in September.

Year-on-year, overall new orders for durable goods improved to minus 11.9 percent in October from minus 18.8 percent in September. Excluding transportation, new durables orders rose to minus 11.3 percent from down 16.3 percent the previous month.

Today's durables orders report indicates that recovery in manufacturing is not a smooth one. Of course, new durables orders are one of the most volatile market moving indicators published by the government and no one month makes a trend. But at face value, the recovery in manufacturing cooled just a little in October. Equities will not like the orders numbers but jobless claims dropped more than expected and some see the personal income report as healthy (though the details suggest not so much).

Consensus Outlook
Durable goods orders in September rebounded a revised 1.4 percent, after a 2.7 percent drop in August. Excluding the transportation component, new durables orders posted a revised 1.2 percent boost, following a downwardly revised 0.5 percent dip. The rebound in new orders was led by machinery and transportation equipment. Weakness was seen in electrical equipment, computers & electronics, and "all other" durables.

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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