2010 Economic Calendar
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Durable Goods Orders  
Released On 8/25/2010 8:30:00 AM For Jul, 2010
PriorPrior RevisedConsensusConsensus RangeActual
New Orders - M/M change-1.0 %3.4 %2.5 %1.0 % to 6.5 %0.3 %
New Orders - Yr/Yr Change15.9 %17.1 %9.3 %
Ex-transportation - M/M-0.6 %0.2 %-3.8 %
Ex-transportation - Yr/Yr15.0 %16.1 %9.5 %

Manufacturing is not as strong as hoped-based on July durables. New factory orders for durable goods in July rebounded 0.3 percent, following a 0.1 percent decline the prior month. The July rebound came in significantly below the consensus forecast for a 2.5 percent comeback.

The bounce back in July was led by the transportation component. Most other components slipped. Excluding transportation, new durables orders dropped 3.8 percent, following a 0.2 percent rise in June. While durables orders are a volatile series and some month-to-month dips are to be expected, the latest news is disappointing.

Most of new orders strength came from transportation which jumped 13.1 percent, following a 1.0 percent decrease in June. Nondefense aircraft spiked 75.9 percent after falling 25.3 percent in June. Defense aircraft orders declined 8.3 percent in the latest month. Analysts often focus on the ex-transportation component to see the underlying trend without the sharp monthly swings from aircraft. But excluding transportation also excludes one of the other few big positives in the report. Looking for a silver lining, the ex-transportation series may actually overstate weakness a bit. Within transportation, motor vehicles continued to post healthy gains, rising 5.3 percent in July after increasing 4.0 percent in June.

Other components were mostly down for the latest period. Declines were seen in fabricated metals, machinery, computers & electronics, and electrical equipment. Advances were seen in primary metals and in "all other."

Businesses may be hitting the pause button on equipment investment. Nondefense capital goods orders excluding aircraft in July fell 8.0 percent, following a 3.6 percent jump the month before. Shipments slipped 1.5 percent in July, following a 1.0 percent rise in June. However, orders and shipments for this series have shown strength for several months.

Year-on-year, overall new orders for durable goods in July were up 9.3 percent, compared to 17.1 percent in June. Excluding transportation, new durables orders came in at up 9.5 percent, compared to 16.1 percent the prior month.

Equity futures fell on the release.

Consensus Outlook
Durable goods orders in June fell 1.0 percent, following a 0.8 percent drop the month before. The June decline was led by the transportation component. Excluding transportation, new durables orders slipped 0.6 percent, following a 1.2 percent gain in May. Outside of transportation, major components were mixed, albeit net negative. Looking ahead, manufacturing surveys for July were mixed on new orders. The ISM new orders index stood at 53.5, just above break-even 50, and the Empire State index was 10.13, notably above its break-even of zero. However, Philly Fed's new orders index was in negative territory at minus 4.3.

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

2010 Release Schedule
Released On: 1/282/253/244/235/266/247/288/259/2410/2711/2412/23
Release For: DecJanFebMarAprMayJunJulAugSepOctNov

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