Durable Goods Orders Drop 4.4% in October, Huge Negative Adjustment in September

Durable goods new orders fell 4.4% in October. The Census Department revised September from +0.8% to -0.1%.

The Census Department Advance Durable Goods Report for October shows unexpected weakness on top of a huge negative revision.

New Orders

New orders for manufactured durable goods in October decreased $11.5 billion or 4.4 percent to $248.5 billion, the U.S. Census Bureau announced today. This decrease, down three of the last four months, followed a 0.1 percent September decrease. Excluding transportation, new orders increased 0.1 percent.Excluding defense, new orders decreased 1.2 percent. Transportation equipment, down following two consecutive monthly increases, drove the decrease, $11.7 billion or 12.2 percent to $84.7 billion.

Shipments

Shipments of manufactured durable goods in October, down following two consecutive monthly increases, decreased $1.4 billion or 0.6 percent to $254.5 billion. This followed a 1.0 percent September increase. Transportation equipment, also down following two consecutive monthly increases, drove the decrease, $1.6 billion or 1.8 percent to $87.6 billion.

Unfilled Orders

Unfilled orders for manufactured durable goods in October, down following eight consecutive monthly increases, decreased $2.0 billion or 0.2 percent to $1,183.0 billion. This followed a 0.7 percent September increase. Transportation equipment, down following two consecutive monthly increases, drove the decrease, $2.9 billion or 0.4 percent to $815.1 billion.

Inventories

Inventories of manufactured durable goods in October, down two of the last three months, decreased $0.1 billion or virtually unchanged to $410.9 billion. This followed a 0.8 percent September increase. Computers and electronic products, down three of the last four months, drove the decrease, $0.4 billion or 1.0 percent to $43.1 billion.

Capital Goods

Nondefense new orders for capital goods in October decreased $3.3 billion or 4.2 percent to $75.3 billion. Shipments decreased $1.9 billion or 2.4 percent to $77.4 billion. Unfilled orders decreased $2.1 billion or 0.3 percent to $715.5 billion. Inventories increased less than $0.1 billion or virtually unchanged to $180.1 billion. Defense new orders for capital goods in October decreased $2.3 billion or 16.6 percent to $11.5 billion. Shipments increased $0.3 billion or 2.9 percent to $12.1 billion. Unfilled orders decreased $0.6 billion or 0.4 percent to $153.4 billion. Inventories increased $0.1 billion or 0.3 percent to $22.8 billion.

Fourth-quarter GDP is not off to a roaring start.

Mike "Mish" Shedlock

Comments (7)
No. 1-5
Realist
Realist

The US economy is continuing to grow slowly, just like it has been for 10 years now. I suspect it will continue to grow slowly for another 2 years, barring some black swan event like a full blown trade war.

mkestrel
mkestrel

But but but Larry Kudlow said 4%. He also said "recession is so far in the distance he cannot see it. " Seems like he is a new contrary indicator.

Carl_R
Carl_R

I wonder how much of this drop is a reduction in manufacturing expansion in the US, due to the tariffs on manufacturing inputs, steel, aluminum, and chips?

Kinuachdrach
Kinuachdrach

When the Census people can make almost a full 1 percent point "adjustment" for the previous quarter … I wonder how reliable any of this "data" is?

Six000mileyear
Six000mileyear

Even with the manufacturing slowdown, inventory has barely budged. That means manufacturing overcapacity is at least 4%. Layoffs are coming.