Reader Tim Wallace sent a series of four charts on durable goods components. Each chart compares April of this year to April in prior years.
Durable Goods Shipments
click on any chart for sharper image
This is the first time since 2008 that April year-over-year shipments are down.
Durable Goods New Orders
This is the first time since 2008 that year-over-year new orders in April declined. New orders rose above the pre-recession high but are now slightly below the 2007 high.
Durable Goods Unfilled Orders
Durable Goods Inventory
Durable goods inventory is near a record high.
The above charts show nominal prices, not adjusted for inflation. Adjusted for inflation, shipments and new orders are well below pre-recession levels.
Over time, shipments and orders should match unless there are cancellations.
Unfilled orders are a reflection on aircraft orders that have a very long lead time and are subject to cancellation. Here is a chart I created in Fred that explains unfilled orders.
Unfilled Orders Breakdown
Blue – Unfilled Orders Total
Green – Unfilled Transportation Orders
Red – Unfilled Orders Excluding Transportation
Unfilled orders except for transportation are meandering along.
New orders is the primary story.
To weed out the possibility that April of 2015 was some sort of outlier, let’s look at some seasonally adjusted growth charts.
Durable Goods New Orders Percent Change From Year Ago
Durable Goods New Orders Excluding Transportation Percent Change From Year Ago
Durable goods orders are a volatile series, in large part due to huge transportation orders but conditions have been weak ever since November of 2014.
Durable Goods Growth From Year Ago
- November 2014: -0.61%
- December 2014: -0.77%
- January 2015: +3.19%
- February 2015: -3.24%
- March 2015: -0.70%
- April 2015: -2.80%
Durable Goods Growth From Year Ago Excluding Transportation
- November 2014: +4.33%
- December 2014: +5.63%
- January 2015: +1.81%
- February 2015: -0.44%
- March 2015: -1.97%
- April 2015: -1.63%
Excluding transportation, the numbers look better. Yet even excluding transportation, year-over-year new orders have been very weak all year.
Mike “Mish” Shedlock