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Apr-24-2008US Economy: Durables Orders, Excluding Transportation, Gain(topic overview)
CONTENTS:
- WASHINGTON (Thomson Financial) - U.S. durable goods orders slid downward for the third straight month in March, as an auto-industry strike forced many plant closings across the country. (More...)
- Nondefense capital goods orders excluding aircraft, a closely watched proxy for business spending, was unchanged as forecast and the previous month was revised up to show a 2.0 percent decline, from a 2.4 percent drop reported before. (More...)
- Unfilled orders rose 0.9 pct, after a 1.0 February increase and a 0.8 rise in January. (More...)
- Parker Hannifin Corp., the world's largest maker of hydraulic equipment, said April 22 that third-quarter earnings gained 22 percent, propelled by international sales. (More...)
- WASHINGTON -- U.S. new-home sales slid further in March to their lowest level since 1991 while the supply of homes for sale soared to nearly a three-decade high, suggesting little prospect of any near-term turnaround. (More...)
- "The manufacturing sector is holding up as at least a partial offset to housing gloom," Derek Holt, an economist at Scotia Capital Inc. in Toronto told Bloomberg. (More...)
- The Standard & Poor's 500 Index was down 0.4 percent at 1,373.84, after futures had fallen as much as 0.8 percent before the market opened. (More...)
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WASHINGTON (Thomson Financial) - U.S. durable goods orders slid downward for the third straight month in March, as an auto-industry strike forced many plant closings across the country. Total new durables orders were off 0.3 pct last month, the Commerce Department reported today, but ex-transportation they rose 1.5 pct. Economists polled by Thomson's IFR Markets had expected orders to rise 0.6 pct for the month, both with and without transportation goods. [1] WASHINGTON, April 24 (UPI) -- Durable goods orders declined for the third consecutive month in the United States in March, the U.S. Commerce Department reported Thursday.[2] WASHINGTON, April 24 (Xinhua) -- Orders for U.S. manufactured durable goods declined for the third consecutive month in March, the longest string of decreases since the 2001 recession, the Commerce Department reported Thursday.[3]
U.S. durable goods orders fell 0.3% in March 2008, as demand for machinery dropped substantially, the U.S. Commerce Department announced Thursday.[4]
April 24 (Bloomberg) -- Foreign demand for U.S.-made durable goods helped American factories weather a collapse in new-home sales to the lowest level in almost 17 years last month, reports indicated today. Bookings for durable goods, those meant to last several years, rose 1.5 percent excluding transportation equipment, the Commerce Department said today in Washington.[5] The Commerce Department said new orders excluding transportation rose 1.5 percent, while transportation equipment fell 4.6 percent, including a matching drop in motor vehicles and parts which was the steepest drop since last August.[6]
Transportation equipment orders were reported down 4.6 pct, accounted for by a matching 4.6 pct drop in new orders for motor vehicles and parts. That was the biggest drop in vehicle orders since an 8.3 pct decline in August of 2007. Analysts had been expecting the strike at American Axle to impact the report, although they were not certain about the degree.[1]
Electrical equipment and appliances were the other major negative in the March report. New orders fell 6.6 pct, their largest decline since August of 2006.[1]
WASHINGTON (Reuters) - New orders for long-lasting U.S. manufactured goods unexpectedly fell 0.3 percent in March after transportation slumped, but a key gauge of corporate investment appetite held steady, government data on Thursday showed.[6] The report showed that durable goods orders fell 0.3 percent in March following a revised 0.9 percent decrease in February.[7] Excluding the decrease in orders for transportation equipment, durable goods orders jumped 1.5 percent in March following a 2.1 percent decrease in February.[7] Demand for transportation equipment, which accounts for more than one quarter of total durable goods orders, decreased by 4.6 percent in March after a rise of 2.1 percent in the previous month.[3] The unexpected decrease in durable goods orders was due in large part to a 4.6 percent decrease in orders for transportation equipment, which followed a 2.1 percent decrease in February.[7]
The jump in durable goods orders excluding transportation equipment reflected notable increases in orders for machinery and computers and electronic products.[7]
Excluding the 4.6% drop in transportation orders, orders for durable goods increased by 1.5 percent in March following a 2.1 percent decline in February.[8] Excluding volatile transportation demand, orders for durable goods gained 1.5 percent, rebounding from a 2.1 percent drop in February.[3]
Nondefense capital goods orders excluding aircraft, a closely watched proxy for business spending, was unchanged as forecast and the previous month was revised up to show a 2.0 percent decline, from a 2.4 percent drop reported before. [6] The report also showed that orders for non-defense capital goods excluding aircraft, which is seen as a good indicator of business spending, were unchanged in March after falling 2.0 percent in the previous month.[7]
Bookings for non-defense capital goods excluding aircraft, a measure of future business investment, was unchanged following a 2 percent decline in February that was smaller than previously estimated. Shipments of those items, a number used in calculating gross domestic product, increased 1.2 percent.[5] Demand for non-defense capital goods excluding aircraft, a closely watched guide to business investment plans, was flat last month after a big 2 percent drop in February.[3]
The widely followed nondefense capital goods orders was up 1.5% and excluding aircraft that category was flat.[9] The overall small decline in orders was caused by a drop of 4.6% in transportation orders and a drop of 19.8% in defense capital goods orders.[9] In March 2008 core capital goods orders were flat, after declining the previous two months.[4] The key core durable goods orders number -- non-defense and ex-aircraft -- which is a proxy for business capital spending, was unchanged for March after falling 2.0 pct in February and 1.0 pct in January.[1] Economists surveyed by Bloomberg News had expected March 2008 durable goods orders to rise 0.6%.[4] Economist David H. Wang told BloggingStocks Thursday the March 2008 durable goods statistic is additional bad news for the U.S. economy.[4]
Washington, D.C. (AHN) - U.S. durable goods orders unexpectedly declined for the third straight month in March, according to a government report released on Thursday.[8] The orders for U.S.-built durable goods declined by 0.3 percent in March compared to an upwardly revision of 0.9 percent decline in Febraury. It had slipped by as much as 4.4 percent in January.[8] Data released by the department showed that orders for durable goods, or big-ticket items expected to last at least three years, dropped 0.3 percent last month, following bigger declines of 0.9 percent in February and 4.4 percent in January.[3]
Total orders for durable goods fell 0.3 percent, restrained by a decrease in defense-related hardware.[5] The Wall Street market analysts surveyed by Dow Jones Newswires had projected the Orders for durable goods to increase only by 0.3 percent rise last month.[8]
The Commerce Department added that shipments of durable goods edged down 0.4 percent in March following a 2.6 percent decrease in January.[7] Thursday, April 24, 2008 9:19:57 AM - Orders for goods meant to last for at least three years unexpectedly fell in March, according to a report released by the Department of Commerce on Thursday, although the decrease was largely due to a decrease in orders for transportation equipment.[7] Orders for durable goods fell to a seasonally adjusted $212.2 billion for March, according to the report.[8] New orders for durable goods fell 0.3% in March. This was not far from the median forecast of +0.1% for this volatile series.[9]
The durable goods orders last fell for three straight months from February to April in 2001, when the country was sliding into recession.[3] "If you exclude the defense-related hardware component, the durable goods order statistic would have been even worse. U.S. corporations continue to benefit from international demand, but those exports are not enough to overcome clear weakness in orders and sales at home."[4] "Demand continues to weaken, and a third straight durable goods order decline indicates that the U.S. economy is contracting.[4]
The downturn momentum to the durable goods orders was added by the manufacturing industry as well as the slowdown in the economy.[8] The weakness in durable goods orders is a reflection of the overall economy which is in danger of sliding into a recession due to a severe housing slump and a persisting credit crunch, according to analysts.[3]
A figure of 50 is the dividing line between growth and contraction. One troubling sign in today's report was that inventories of durable goods jumped 1.1 percent, the most this year, and shipments fell. That indicates that, while gains in stockpiles may have contributed to economic growth last quarter, companies will need to pare production in coming months.[5] Shipments of durable goods have declined four of the past five months, falling in March to $210.1, down $800,000 million or 0.4 percent.[2] Inventories of durable goods rose 1.1 percent, marking the eighth increase in the past nine months.[7]
New orders for manufactured goods intended to last more than three years, decreased by $700 million to $212 billion, 0.3 percent below the previous month.[2] Growth slowed to a 0.3 percent annual pace from January through March, the weakest in more than five years, according to the median estimate of economists surveyed by Bloomberg News. The Fed last week said economic growth slowed in nine of 12 districts since February, hurt by "anemic'' real estate markets and a slowdown in consumer spending, according to its regional business survey known as the Beige Book.[5] Separate figures showed new-home sales slid 8.5 percent. Treasuries fell, sending two-year note yields to their highest since January, on speculation the Federal Reserve will pause its series of interest-rate cuts after this month. Morgan Stanley and Lehman Brothers Holdings Inc. economists raised their estimates of first-quarter economic growth.[5]
Economists had expected orders to edge up 0.1 percent compared to the 1.7 percent decrease originally reported for the previous month.[7] Economists forecast total orders would rise 0.1 percent, according to the median of 78 projections in a Bloomberg News survey.[5]
Excluding transportation equipment, orders were projected to rise 0.5 percent, after a previously reported 2.4 percent decline for February.[5] Total orders excluding defense equipment orders increased 0.3 percent as bookings for military gear dropped 20 percent.[5]
"Manufacturing is holding up due to strength in the global economy, the weak dollar and the fact that businesses are still pretty profitable,'' said Gus Faucher, head of macroeconomics at Moody's Economy.com in West Chester, Pennsylvania, which correctly forecast the gain in durables orders excluding transportation.[5] The backlog of unfilled orders will keep factories humming for a while even if new orders remain essentially flat. This data should not be considered strong, but also not so weak as to suggest economic conditions in manufacturing are deteriorating rapidly. These rate as further evidence of "bad, but not recession bad" manufacturing conditions.[9] Non-defense new orders increased $1.1 billion, while and defense orders declined $1.9 billion in March, the report said.[2] Boeing (nyse: BA - news - people )'s orders fell to 99 in March from 125 in February.[1] 'So pretty much any way you slice it,' said RBS Greenwich Capital chief economist Stephen Stanley (nyse: SXE - news - people ), 'the March result was little changed.[1] Economists currently expect next week's report to show that the economy lost about 80,000 jobs in April, matching the decrease that was seen in March.[7] The decrease in jobs in March came as a decrease of 93,000 jobs in the goods-producing sector more than offset an increase of 13,000 jobs in the service-producing sector. Manufacturing and construction employment both showed notable declines.[7] Data released by the Office for National Statistics showed that the retail sales dropped 0.4% month-on-month in March, a slightly bigger fall than the 0.3% decline forecasted. The Swiss currency fell against its Japanese counterpart in trading on Thursday.[10]
The report showed that jobless claims fell to 342,000 from the previous week's revised figure of 375,000.[7] Thursday, April 24, 2008 8:51:26 AM - Thursday morning, the Department of Labor released its report on initial jobless claims in the week ended April 19th, showing that jobless claims unexpectedly decreased compared to the revised data for the previous week.[7]
The unexpected decrease in weekly jobless claims may generate some optimism about the Labor Department's monthly employment report due to be released next Friday.[7]
The number of U.S. workers filing initial claims for unemployment fell unexpectedly by 33,000 last week according to the Labor Department.[10] The report also showed that continuing claims in the week ended April 12 fell to 2.934 million from the preceding week's revised level of 2.999 million.[7] Separate figures today showed first-time jobless claims unexpectedly fell to a two-month low last week.[5]
Economists had expected jobless claims to edge up to 375,000 from the 372,000 originally reported for the week ended April 12th.[7] The increase exceeded the estimates of economists, who had expected to the unemployment rate to edge up to 5.0 percent. With the increase, the unemployment rate rose to its highest level since September of 2005, which reflected the impact of the Gulf Coast hurricanes.[7] The report also showed that the unemployment rate jumped to 5.1 percent in March from 4.8 percent in February.[7]
Bookings for aircraft increased 5.5 percent in March, while automobiles dropped 4.6 percent.[5] A 4.6 percent decrease in orders for motor vehicles and parts more than offset a 5.5 percent increase in orders for commercial aircraft and parts and a 29.4 percent increase in orders for defense aircraft and parts.[7] Decline in the demand for big-ticket items in the U.S. came from the 4.6 percent drop in orders for motor vehicles and parts.[8]
The notable drop in orders for motor vehicles and parts was partly due to an ongoing strike at American Axle (AXL), which has caused General Motors (GM) to curtail production at about 30 factories.[7]
Orders for February were revised to a drop of 0.9 percent, less than the 1.1 percent previously estimated.[5] Orders for commercial aircraft rose by 5.5 percent last month and demand for defense aircraft surged by 29.4 percent.[3] Normally that would be a negative in the Commerce Department report, but civilian aircraft orders were up 5.5 pct for the month.[1] Additional pressure came from an auto-industry strike that forced several plants closings across the country, according to the Commerce Department's report released on Thursday.[8] Today's figures are one of the last that may influence forecasts ahead of the Commerce Department's advance report on first-quarter gross domestic product due April 30.[5]
Sales of single-family homes slumped 8.5% last month to a seasonally adjusted annual rate of 526,000, the Commerce Department said Thursday. That's the lowest level since October 1991.[11] New-home sales dropped to an annual pace of 526,000, the lowest since October 1991, from 575,000 the prior month, the Commerce Department said.[5]
A shrinking trade gap added 1 percentage point to fourth-quarter economic growth, according to Commerce Department figures.[5]
Unfilled orders rose 0.9 pct, after a 1.0 February increase and a 0.8 rise in January. [1] While, the Pentagon ordered as much as 29.5 percent increase in orders for military planes.[8] Unfilled orders, which have risen for 34 of the past 35 months, increased $7.3 billion or 0.9 percent to $830.1 billion.[2] Inventories also increased, up 1.1 percent to $327.1 billion, an increase of $3.5 billion.[2]
Parker Hannifin Corp., the world's largest maker of hydraulic equipment, said April 22 that third-quarter earnings gained 22 percent, propelled by international sales. The company also boosted its full-year forecast. [5] The median sales price declined 13.3 percent from a year before, the most in almost four decades.[5] Machinery sales, which declined with a double-digit figure in February, retreated up by 6.2 percent during the last month.[8]
WASHINGTON -- U.S. new-home sales slid further in March to their lowest level since 1991 while the supply of homes for sale soared to nearly a three-decade high, suggesting little prospect of any near-term turnaround. [11]
Export and other orders have remained surprisingly strong, and that is why industrial production was up 0.3% in March and has also showed surprising resilience. It may continue to do so, as the backlog of orders is well above record levels.[9] The February change, originally reported at -1.7% and revised to -1.1% with the total factory orders release, has now been revised to an even smaller decline of 0.9%.[9]
"The manufacturing sector is holding up as at least a partial offset to housing gloom," Derek Holt, an economist at Scotia Capital Inc. in Toronto told Bloomberg. [8] "I expect over the next three to four months continued weakness in durable goods, which means continued weakness in capital spending.''[5] For the economy to grow, we must see stronger durable goods demand, " Wang said.[4]
The Standard & Poor's 500 Index was down 0.4 percent at 1,373.84, after futures had fallen as much as 0.8 percent before the market opened. Traders anticipate the Fed will lower its benchmark rate a quarter point to 2 percent next week and then hold off on further reductions, future prices show. [5] Manufacturers are benefiting from a 9 percent drop in the dollar against currencies of major trading partners over the last year, spurring record exports.[5]
SOURCES
1. US March durable goods orders down 0.3 pct, ex-transportation up 1.5 pct UPDATE - Forbes.com
2. Durable goods orders declined in March - UPI.com
3. U.S. durable goods orders fall for third consecutive month_English_Xinhua
4. U.S. durable goods orders fall for third straight month - BloggingStocks
5. Bloomberg.com: Worldwide
6. Durable goods slip 0.3 percent on transport | Markets | Economy | Reuters
7. RTTNews - Forex News top stories, Forex Trading, European Market Update, Currency Market Update, Forex trading.
8. U.S. Durables Orders Fell By 0.3pct For Third Straight Month | April 24, 2008 | AHN
9. Briefing.com: Durables Reflect Resilient Manufacturing
10. RTTNews - Currency Trading, Currency Market Update, Trading Opportunities, US Market Update .
11. Free Preview - WSJ.com
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