| Durable Goods Orders |
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Released On 5/26/2010 8:30:00 AM For Apr, 2010
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Prior | Prior Revised | Consensus | Consensus Range | Actual |
| New Orders - M/M change | -1.3 % | 4.4 % | 1.5 % | 0.5 % to 6.4 % | 2.9 % | | New Orders - Yr/Yr Change | 11.9 % | 17.3 % | | | 18.9 % | | Ex-transportation - M/M | 2.8 % | 4.8 % | | | -1.0 % | | Ex-transportation - Yr/Yr | 13.5 % | 19.2 % | | | 18.0 % |
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Highlights
The April durables report lived up to its reputation as a volatile series but this time it was not just in the new numbers but in revisions. Net, durables are still notably healthy. New factory orders for durable goods in April surged 2.9 percent after a revised no change the month before. The headline number topped analysts' projection for a 1.5 percent comeback. The jump in the headline number was led by huge boost in the transportation component.
Excluding the transportation component, new durables orders slipped 1.0 percent after a 4.8 percent spike in March. The swing was largely in civilian aircraft. However, taking into account the March strength in ex-transportation, the relatively small decline in ex-transportation leaves new orders at healthy levels.
Nondefense capital goods orders excluding aircraft fell back 2.4 percent in April after a sharp 6.5 percent boost the month before. Shipments for this category-and source data for equipment investment in GDP-edged up 0.2 percent in April, following a 2.3 percent increase the month before.
Year-on-year, overall new orders for durable goods in April were up a robust 18.9 percent, compared to 17.3 percent in March. Excluding transportation, new durables orders stood at up 18.0 percent, compared to 19.2 percent in March.
The bottom line is that after taking into account monthly volatility, durables orders are still strong at both the headline and core levels. If manufacturing growth is slowing, it is too early to tell from this report.
On the news, equity futures firmed as did Treasury yields. The dollar index was little changed.
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Market Consensus before announcement
Durable goods orders in March dipped a revised 1.2 percent after gaining 0.5 percent in February. But the headline number was pulled down by a sharp drop in nondefense aircraft orders-a very volatile series. Excluding the transportation component, however, new durables orders actually spiked a revised 3.7 percent, following a 2.1 percent rebound in February. The March surge in ex-transportation was the biggest since a 5.3 percent spike in August 2005. Looking ahead, key manufacturing surveys suggest a healthy new orders figure for April. The ISM, Philly Fed, and New York Fed manufacturing surveys showed a strengthening in their new orders index for April.
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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
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![[Chart]](showimage.asp?imageid=19221)
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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
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