Economists Wrong on Durable Goods By an Amazing 3.9 Percentage Points

Mish

Economists expected a 1.5% rise in durable goods orders. Instead they fell 2.0% on top of a negative revision.

In one of the biggest economic misses that I can recall, the Econoday durable goods consensus was overly optimistic by a whopping 3.9 percentage points after factoring in negative revisions.

Econoday Durable Goods Forecast

​Advance Report Details

Let's dive into the Census Advance Durable Goods Report for more details.

New Orders

  • New orders for manufactured durable goods in November decreased $5.0 billion or 2.0 percent to $242.6 billion, the U.S. Census Bureau announced today. This decrease, down two of the last three months, followed a 0.2 percent October increase.
  • Excluding transportation, new orders were virtually unchanged.
  • Excluding defense, new orders increased 0.8 percent. Transportation equipment, also down two of the last three months, led the decrease, $4.9 billion or 5.9 percent to $79.2 billion.

Shipments

  • Shipments of manufactured durable goods in November, up following four consecutive monthly decreases, increased $0.2 billion or 0.1 percent to $251.6 billion.
  • This followed a 0.1 percent October decrease. Fabricated metal products, up three of the last four months, drove the increase, $0.3 billion or 1.0 percent to $34.1 billion.

Unfilled Orders

  • Unfilled orders for manufactured durable goods in November, down two of the last three months, decreased $4.7 billion or 0.4 percent to $1,159.0 billion. This followed a virtually unchanged October increase.
  • Transportation equipment, down following four consecutive monthly increases, led the decrease, $4.6 billion or 0.6 percent to $790.3 billion.

Inventories

  • Inventories of manufactured durable goods in November, up sixteen of the last seventeen months, increased $1.8 billion or 0.4 percent to $434.0 billion. This followed a 0.4 percent October increase.
  • Transportation equipment, also up sixteen of the last seventeen months, drove the increase, $1.8 billion or 1.2 percent to $149.3 billion.

Capital Goods

  • Nondefense new orders for capital goods in November decreased $1.3 billion or 1.8 percent to $71.3 billion.
  • Shipments decreased $0.7 billion or 0.9 percent to $74.4 billion. Unfilled orders decreased $3.1 billion or 0.5 percent to $684.3 billion. Inventories increased $1.1 billion or 0.6 percent to $196.8 billion.
  • Defense new orders for capital goods in November decreased $5.5 billion or 35.6 percent to $10.0 billion.
  • Shipments decreased $0.1 billion or 0.5 percent to $12.8 billion. Unfilled orders decreased $2.7 billion or 1.7 percent to $158.2 billion. Inventories increased less than $0.1 billion or 0.2 percent to $24.3 billion.

Shockingly Bad Report

This was a shockingly bad report in the face of the GM strike that ended on October 25.

Economists expected a huge jump in orders that instead went hugely in reverse.

Yet, inventories are up 16 out of the last 17 months.

This forecast miss is on top of a large miss in new home sales estimates. For details, please see New Home Sales Badly Miss Expectations.

Mike "Mish" Shedlock

Comments (9)
Tony Bennett
Tony Bennett

"Yet, inventories are up 16 out of the last 17 months."

...

Not quite apples to apples ... but ...

ytd total new durable orders .... -1.3% vs 2018

year over year (November) total inventories ... +4.7%

SOMETHING will have to give.

No. 1-4
lol
lol

Slow steady economic rot continues into it's 2nd decade,but hey as long as check from big gov,that handout from big gov.that subsidy from big gov.that paycheck from big gov comes 1st of the month...…..who cares!

Herkie
Herkie

This is a recession. They will just not admit that. And as long as they can plaster over disastrous employment figures with a quarter million census bureau hires that are all temporary we will be fine right? The problem of course is that all those quarter million new hires are going to hit the unemployment lines just about election day.

Greenmountain
Greenmountain

How much can the whopping new defense budget offset orders over next 12 months? And troop withdrawals around the globe will also like increase defense purchases by other countries. The new growth model.


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