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November 21, 2018 | Durable Goods Orders Drop 4.4% in October, Huge Negative Adjustment in September

Mike 'Mish' Shedlock

Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.
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

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November 21st, 2018

Posted In: Mish Talk

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