Durable Goods Orders Down Second Month: Very Ugly Numbers Excluding Defense

Durable goods orders fell 0.6% in May after declining an upwardly revised 1.0% in April.

The Census Department Advance Report on Durable Goods sports some ugly numbers for May.

  1. New Orders: -0.6%
  2. Excluding Transportation: -0.3%
  3. Excluding Defense: -1.5%
  4. Motor Vehicles and Parts: -4.2%
  5. Defense Aircraft and Parts: +21.1%
  6. Nondefense Capital Goods: -2.0%
  7. Nondefense Capital Goods Excluding Aircraft: -0.2%
  8. Defense Capital Goods: +15.1%

Those are some of the worst numbers I have seen in a long time. Defense orders masked an extremely weak report.

Shipments, a direct GDP feed, were down 0.1% in May and flat in April.

Mike "Mish" Shedlock

Comments (11)
No. 1-11
JonSellers
JonSellers

Without a massive budget deficit being spent on a massive military welfare system, the economy would be in the toilet.

nic90750
nic90750

what about booming consumer spending at the retail level, white hot housing markets where anything that comes on the market receives multiple offers over asking within days (if not hours) of being listed, and the 3.8% unemployment rate?? How do those relate to massive military welfare system? and the three I mentioned are leading the economy to possibly 6% GDP in the 2nd half 2018

Realist
Realist

It seems that most posts on this site are either over-optimistic or over-pessimistic regarding US economic growth. Nic, at 6%, is the most optimistic I’ve seen. Mish, of course, is usually bearish. I will continue to predict 2% growth over the next few years provided Trump doesn’t start a full-blown trade war. (And he’s getting close!)

Stuki
Stuki

And, as long as neither mindlessly putting Washington's face on paper sheets, nor constructing bomb craters in faraway corners of the world, produces one lick of value............. where does that then, inevitably, leave "the economy" ?

bradw2k
bradw2k

Booming consumer spending and housing markets, coupled with extremely low savings rates, say less about aggregate productivity and more about the shrinking range of financial consciousness in America. Your neighbors are burning savings/capital, and/or "investing" it in high-risk assets. Of course, this is largely due to the perverse incentives of a system that has killed the yield of safe investments.