July Durable Orders

Updated 27-Aug-08 08:46 ET

Highlights

Durable goods orders were strong across the board in July. There is no evidence of a weakening manufacturing sector in the data. In fact, the trends suggest that manufacturing overall may pick up through the end of the year.
Excluding transportation, orders were up 0.7. Transportation orders were up 3.1%.
Excluding defense, orders were up 2.8%. Defense capital goods orders fell 25.7%.
Machinery orders were up 4.6% and primary metals 2.2%. Computer and electrical orders fell 1.3%. Nondefense capital goods orders excluding aircraft rose 2.5%. This is considered a barometer of underlying business investment trends.
Shipments, which are the fulfillment of orders and correlate with GDP components, surged 2.5%. Unfilled orders rose 0.8% to record levels.
These data are strong across the board and very positive from an economic standpoint.

Durable goods orders, and total factory orders (which include nondurables orders), continue to show surprising strength given overall economic conditions. Orders are near flat to up a bit on a year-over-year basis and the backlog of orders is at record highs. Manufacturing has been very resilient and has yet to move into recessionary mode even as the housing market and consumer sectors remain depressed. The weakness in manufacturing has been greatly exaggerated.

Category	Jul	Jun	May	Apr	Mar
Total Durable Orders	1.3%	1.3	0.1	-1.0	-0.2
Less Defense	2.8	0.6	-0.7	-0.8	0.1
Less Transport	0.7	2.4	-0.5	1.9	1.8
Transportation	3.1	-1.9	1.8	-8.3	-5.1
Capital Goods	2.0	-0.5	1.5	-1.9	-0.3
Nondefense	6.3	-2.6	0.0	-2.4	1.4
Nondefense/nonaircraft (core cap gds)	2.6	1.3	-0.3	3.1	-1.0
Defense Cap Goods	-25.7	15.0	14.1	3.3	-13.2