Huge surges and declines in aircraft orders have made for extremely volatile durable goods orders lately. Last month aircraft orders surged 227 percent, this month aircraft orders plunged 82 percent.

Last month aircraft orders surged 227 percent, this month aircraft orders plunged 82 percent.

Amidst this volatility, the Econoday consensus estimate of -5.8% was reasonably close to the mark.

Durable goods orders came in as billed with a steep aircraft-related decline for the headline, at minus 6.8 percent, contrasting with solid gains for ex-transportation at 0.5 percent and core capital goods (nondefense ex-aircraft) at 0.4 percent. A special plus in the report, and one that will lift GDP, is a sharp pickup in shipments of core capital goods, up 1.0 percent in July with June revised 2 tenths higher to 0.6 percent.

Total shipments rose 0.4 percent with inventories keeping a balanced pace, up 0.3 percent. A negative in the report is a 0.3 percent decline in unfilled orders that follows, however, June’s 1.3 percent surge.

For aircraft, which has picked up this year, orders fell 82 percent in July vs June’s enormous 227 percent jump. Orders for defense aircraft, up nearly 50 percent, are a positive in July’s data as is electrical equipment, up 2.6 percent in a good sign for construction. Computers and fabricated metals also show gains. Negatives include a 1.2 percent order decline for vehicles that follows a 0.7 percent decline in June and a 1.4 percent decline for machinery orders that belies the month’s strength for core capital goods.

Durable Goods New Orders

Shipments and New Orders

THis was a mostly neutral but slightly positive report. Autos were down but core capital goods (nondefense capital goods excluding aircraft) orders rose.

Mike “Mish” Shedlock