Durable Goods Orders Sink 2.1%, Non-Defense Orders Sink 4.1%

Manufacturing continues its slide as one might expect in the wake of the latest ISM reports.

Please consider details from the Advance Report on Durable Goods Manufacturers’ Shipments, Inventories and Orders for June 2011.

New Orders

New orders for manufactured durable goods in June decreased $4.0 billion or 2.1 percent to $192.0 billion, the U.S. Census Bureau announced today. This decrease, down two of the last three months, followed a 1.9 percent May increase. Excluding transportation, new orders increased 0.1 percent. Excluding defense, new orders decreased 1.8 percent.

Transportation equipment, also down two of the last three months, had the largest decrease, $4.2 billion or 8.5 percent to $45.4 billion. This was due to nondefense aircraft and parts which decreased $2.8 billion.

Inventories

Inventories of manufactured durable goods in June, up eighteen consecutive months, increased $1.6 billion or 0.4 percent to $357.2 billion. This was at the highest level since the series was first published on a NAICS basis and followed a 1.2 percent May increase.

Transportation equipment, also up eighteen consecutive months, had the largest increase, $1.2 billion or 1.1 percent to $109.1 billion. This was also at the highest level since the series was first published on a NAICS basis and followed a 1.7 percent May increase.

Capital Goods

Nondefense new orders for capital goods in June decreased $3.0 billion or 4.1 percent to $69.8 billion. Shipments increased $0.7 billion or 1.1 percent to $67.7 billion. Unfilled orders increased $2.1 billion or 0.4 percent to $504.7 billion. Inventories increased $2.1 billion or 1.3 percent to $162.7 billion.

Defense new orders for capital goods in June decreased $0.3 billion or 3.9 percent to $8.6 billion. Shipments decreased $0.1 billion or 1.6 percent to $7.8 billion. Unfilled orders increased $0.9 billion or 0.6 percent to $150.3 billion. Inventories decreased $0.5 billion or 2.3 percent to $20.3 billion.

Shipments

Shipments of manufactured durable goods in June, up six of the last seven months, increased $1.0 billion or 0.5 percent to $196.0 billion. This followed a 0.5 percent May increase. Machinery, up four of the last five months, had the largest increase, $0.7 billion or 2.6 percent to $29.1 billion.

Unfilled Orders

Unfilled orders for manufactured durable goods in June, up fourteen of the last fifteen months, increased $2.1 billion or 0.2 percent to $862.7 billion. This followed a 0.9 percent May increase.

Machinery, up seventeen consecutive months, had the largest increase, $2.1 billion or 2.0 percent to $111.2 billion. This was at the highest level since the series was first published on a NAICS basis in 1992 and followed a 3.4 percent May increase.

In general, orders were down and shipments were up. Nondefense was hammered. Unfilled orders are on the verge of contraction.

This set of data does not bode well for employment.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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