Long Term Perspective

New orders for durable goods reveal demand for consumer goods such as cars and home appliances as well as investment equipment such as lathes and computers.  Transportation is a relatively volatile component within durables orders due to the lumpy nature of aircraft orders—civilian and defense. Analysts prefer to follow durables excluding transportation in the short-term to see the underlying cyclical trend.   Over the long run durables overall and excluding transportation tend to track each other.

 

 

Short Term Perspective

Manufacturing has shown volatility in data in recent months.   Durable goods orders fell back in August, coming off July's surge in aircraft orders. But the core was healthy in August.  New factory orders for durables dropped a monthly 18.4 percent, following a spike of 22.5 percent in July.  For the historical series, August was a record monthly decline and July was a record increase.  Transportation fell a monthly 42.2 percent in August, following a 73.3 percent jump the month before.  Excluding transportation, durables orders rebounded 0.4 percent, following a decline of 0.6 percent in July. Recent durables orders have shown record volatility.  On average, durables orders point to modest upward momentum in manufacturing.