February Durable Goods: Orders Down, Shipments Down, Inventory Up
Commenter RJS at MARKETWATCH 666
February Durable Goods: New Orders Down 1.1%, Shipments Down 3.5%, Inventories Up 0.7%
The Advance Report on Durable Goods Manufacturers’ Shipments, Inventories and Orders for February (pdf) from the Census Bureau reported that the value of the widely watched new orders for manufactured durable goods decreased by $2.9 billion or 1.1 percent to $254.0 billion in February, the first decrease in 10 months, after January’s new orders were revised from the $256.6 billion reported last month to $256.9 billion, now a 3.5% increase from December’s new orders . . . as a result, year to date new orders are still up by 3.4% from those of 2020 . . .
The volatile monthly new orders for transportation equipment led February’s new orders decrease, as the value of new transportation equipment orders fell $1.3 billion or 1.6 percent to $83.6 billion, despite a 103.3% increase to $9,504 million in new orders for defense aircraft, as the value of new orders for motor vehicles and parts fell 8.7% to $57,588 million…excluding orders for transportation equipment, other new orders fell 0.9%, while excluding just new orders for defense equipment, new orders fell 0.7%….meanwhile, new orders for nondefense capital goods less aircraft, a proxy for equipment investment, were also weak, falling by $563 million or 0.8% to $72,480 million . . .
Over the same period, the seasonally adjusted value of February’s shipments of durable goods, which will ultimately be included as inputs into various components of 1st quarter GDP after adjusting for changes in prices, fell for the first time in six months, decreasing by $9.1 billion or 3.5 percent to $250.9 billion, after the value of January shipments was revised from $513.3 billion to $512.2 billion, now up 1.7% from December, rather than the 2.0% increase reported a month ago . . . lower shipments of transportation equipment were mostly responsible for the February shipments decrease, as they decreased by $7.0 billion or 8.2 percent to $78.6 billion, on an 8.9% decrease to $57,196 million in the value of shipments of motor vehicles and parts . . . meanwhile, the value of shipments of nondefense capital goods less aircraft fell 1.0% to $71,281 million, after January’s capital goods shipments were revised down from $72,054 million to $71,966 million . . .
Meanwhile, the value of seasonally adjusted inventories of durable goods, also a major GDP contributor, rose by $2.8 billion or 0.7 percent to $427.3 billion, the first increase in three months, after the value of January inventories was revised from $424.3 billion to $424.5 billion, still down 0.3% from December . . . the value of inventories of transportation equipment rose $0.9 billion or 0.6 percent to $146.6 billion, led by a 2.6% increase to $41,612 in inventories of motor vehicles and parts, while the value of all other inventories rose 0.7% to $280,654 million . . .
Finally, the value of unfilled orders for manufactured durable goods, which are probably a better measure of industry conditions than the widely watched but often very volatile new orders, rose for the second consecutive month after failing to rise over the prior ten, increasing by $8.4 billion or 0.8 percent to $1,082.0 billion, following a 0.2% January increase to $1,073.65 billion, which was revised from the previously reported 0.1% increase to $1,072.6 billion . . . a $5.0 billion or 0.7 percent increase to $711.1 billion in unfilled orders for transportation equipment led the February increase, while unfilled orders excluding transportation equipment orders were up 0.9% to $370,865 million . . . however, the unfilled order book for durable goods is still 5.7% below the level of last February, with unfilled orders for transportation equipment 10.9% below their year ago level, mostly due to a 15.5% decrease in the backlog of orders for commercial aircraft and parts . . .