US durable goods orders fall in December, third monthly decline

WASHINGTON (ICIS)--New orders for US durable goods fell in December from November by $5bn (€3.65bn) or 2.5% to $191bn, the Department of Commerce said on Thursday, the third straight month of declines and the fourth downturn in five months.

However, the department’s data showed that the December decline was wholly attributed to an almost 100% drop in new orders for commercial airliners and parts.

Aircraft orders are often made in multiple-plane purchases and in any given month those commitments - or their lack - can affect manufacturing data disproportionately. 

With aviation orders backed out of the total, new orders for durable goods rose by a narrow 0.5% in December, the department said.

Durable goods are manufactured products meant to last three years or more and include such items as automobiles, appliances, transportation and manufacturing equipment. 

Many durable goods, such as computers and automobiles, are major downstream markets for chemicals and derivatives used in manufacturing processes or as end-product components.

In its monthly report, the department said that unfilled orders for durable goods fell by $3.6bn or 0.4% in December to $822.8bn.  It was the first decline in eight months and followed a 0.5% gain in November.

Inventories of manufactured but unsold goods rose by $2.1bn or 0.7% in December to $322bn, according to the report.

The department said that inventories have been gaining for the past 12 months.

The decline in unfilled orders and the year-long increase in inventories of unsold goods suggest to some economists that the recovery in the US manufacturing sector may be slowing.

US durable goods orders and inventories*

	Dec (bn $)	Dec vs Nov   (%)	Nov vs Oct (r) (%)
New orders	191.0	-2.5	-1.0
Unfilled orders	822.8	-0.4	0.5
Total inventories	322.0	0.7	0.9