jueves, 25 de julio de 2013

Durable Goods Orders

Durables orders sharply beat expectations at the headline level but it was almost entirely due to aircraft orders at Boeing. Elsewhere, durables orders were mixed, ending net at flat for June. New factory orders for durables in June surged 4.2 percent, following an upward revised 5.2 percent (originally 3.7 percent) for May. Market expectations were for a 1.5 percent boost for June. The transportation component spiked 12.8 percent after a 14.8 percent jump in May. Excluding transportation, durables orders were unchanged in June, following a 1.0 percent rise in May. The consensus expected a 0.6 percent decrease in orders excluding transportation.

Unfilled orders, however suggest some overall continuing momentum for manufacturing. Overall unfilled orders jumped 2.1 percent in June, following a 1.1 percent increase in May. This was mostly aircraft but non-transportation was still respectable. Unfilled durables excluding transportation increased 0.9 percent in June, matching the May pace.

Turning back to new orders data, within transportation, motor vehicles gained 1.3 percent, nondefense aircraft jumped 31.4 percent, and defense aircraft increased 18.7 percent. Outside of transportation, components were mixed but net zero. Gains were seen in fabricated metals, machinery, and "other." Declines were seen in primary metals, computers & electronics, and electrical equipment.

Nondefense capital goods orders excluding aircraft continued to rise. This series rose 0.7percent, following a 2.2 percent boost in May. However, shipments for this series declined 2.0 percent, following a large 6.1 percent surge the month before.

Outside of aircraft, manufacturing appears to be sluggish in June although following moderate strength in May. But unfilled orders indicate a modest recent upward trend in manufacturing. The next big news for manufacturing will be next week's Markit PMI, ISM manufacturing, and manufacturing components in the employment situation.
Market Consensus before announcement
Durable goods orders in May jumped 3.7 percent, following a 3.6 percent spike the month before. The transportation component surged 10.9 percent after an 8.0 percent boost in April. Within transportation, nondefense aircraft jumped a monthly 50.8 percent; defense aircraft rose 3.7 percent; motor vehicle orders slipped 2.0 percent; and ships & boats jumped 50.8 percent. Excluding transportation, durables orders still gained 0.5 percent after a 1.8 percent increase in April. Outside of transportation, component strength for May was mostly broad based. Numbers reflect revisions from the more recent total factory orders report.