Preview: Due February 18 - U.S. December Durable Goods Orders - Aircraft to slip, but ex transport trend is positive
We expect December durable goods orders to fall by 5.0% after a 5.3% increase in November, the reversal led by aircraft after a strong November increase. Ex transport we expect a 0.4% increase, matching the gain in November.
Boeing orders were only slightly lower in November after a sharp rise in November but seasonally adjusted a full reversal of November’s aircraft increase in the durable goods orders data should be seen. Autos are likely to see little change but we expect a bounce in defense, which has a large overlap with transport, after two straight declines. Ex defense expect a fall of 5.7% after a 6.3% increase in November.
ISM manufacturing new orders picked up sharply in January but remained weak in December. December manufacturing output increased by 0.2%, 0.3% ex autos. Trend in durable goods orders ex transport is now positive, having seen seven straight gains. Another moderate gain is likely in December ex transport orders, we expect by 0.4%, matching November’s.
We expect non-defense capital orders ex aircraft, a key indicator of business investment, to outperform the ex-transport series with a rise of 0.5%. Both series increased by 0.4% in November but non-defense capital ex aircraft outperformed in the preceding three months. Business equipment has been leading recent gains in industrial production.
