 | New Orders for Durable Goods Declined 1.0% in January |
|
| Posted Under: Data Watch • Durable Goods • Employment |
Implications: Durable goods declined 1% in January, but the loss was not as large as the consensus expected and was primarily due to a large drop in aircraft orders, which are extremely volatile from month to month. Orders excluding transportation rose 1.1% in January, the largest gain in eight months, led by fabricated metals. Although shipments of "core" capital goods, which exclude defense and aircraft, slipped 0.8% in January, we think that part of the report was hurt by weather, which slowed all sorts of business activity around the country last month. And, despite the drop in January, shipments of core capital goods are up at a 6% annual rate in the past six months. We still believe both orders and shipments will accelerate in 2014. Consumer purchasing power is growing and debt ratios are low, leaving room for an upswing in appliances. Meanwhile, businesses have record profits and balance sheet cash, leaving more room for business investment. Looking ahead, perhaps the best news in today's report was that unfilled orders for core capital goods rose 0.8% in January, hitting a new record high, and are up 9% from a year ago. In other news this morning, initial claims for unemployment insurance increased 14,000 last week to 348,000. Continuing claims increased 8,000 to 2.96 million. Plugging these figures into our payroll models suggests a February gain of 165,000. This forecast, which may change in the week ahead, is slightly higher than the 150,000 the consensus expects.
Click here for a PDF version
|
|