New Orders in Durable Goods, advance report, decreased -4.2% for March 2012. February durable goods new orders were revised, from 2.2% to 1.9%.

 

 

Volatile non-defense aircraft and parts declined -47.6% in a month and was a large part of this month's decrease in durable goods. Excluding transportation, which includes aircraft, new orders dropped -1.1%.

Shipments overall increased 1.0% from February, in part a reflection of February's new orders percentage increase of 1.9%. Below is the monthly percent change for all durable goods shipments.

 

 

Core capital goods new orders decreased -0.8%, after increasing 2.8% in February. Core capital goods is an investment gauge for the bet the private sector is placing on America's future economic growth.

 

 

For all transportation equipment, new orders decreased -12.5%, but this includes volatile aircraft. While Nondefense aircraft decreased -47.6% and defense aircraft increased 15.5%. Motor vehicles & parts only increased 0.1% for March. It's typical for aircraft to vary dramatically, after all who orders up a billion dollar air-o-plane every day? Below is a graph of all transportation equipment new orders.

 

 

Core capital goods are a leading indicator of future economic growth. It's all of the stuff used to make other stuff, kind of an future investment in the business meter. Core capital goods excludes defense and all aircraft.

Shipments in core capital goods increased 2.6%. Machinery is a large part of core capital goods and machinery shipments increased 6.5% for the month. Next month shouldn't be as good since machinery new orders dropped -2.6% for March.

 

 

To put the monthly percentage change in perspective, below is the graph of core capital goods, monthly percentage change going back to 2000. Looks like noise right? In January 2009, core capital goods new orders dropped -9.9% and also declined by -9.4% in December 2008.

 

 

Inventories, which also contributes to GDP, are at an all time high and up 0.4% for March after increasing 0.3% in February. Inventories have been at all time highs for months and have increased for 27 months in a row. Core Capital Goods inventories increased 0.7%.

Unfilled orders had no change from February with core capital goods unfilled orders increasing by +0.2%.

Core shipments contributes to the investment component of GDP. Annualized Q1 2012 durable core capital goods shipments changed 1.7%.

 

 

Producer's Durable Equipment (PDE) is part of the GDP investment metric, the I in GDP or nonresidential fixed investment. It is not all, but part of the total investment categories for GDP, usually contributing about 50% to the total investment metric (except recently where inventories have been the dominant factor).

Producer's Durable Equipment (PDE) is about 75%, or 3/4th of the durable goods core capital goods shipments, in real dollars, used as an approximation.

What is a durable good? It's stuff manufactured that's supposed to last at least 3 years. Yeah, right, electronics, laptops and cell phones and crappy printers, refrigerators that break in a matter of months. Regardless, that's the definition.

Here is last month's overview, not revised, although the graphs are. One might get a sense of how strongly the durable goods report is revised as more data comes into the Census bureau.