Preview: Due February 27 - U.S. January Durable Goods Orders - Aircraft to lead but ex transport to rise
We expect January durable orders to increase by 3.5% overall with a 0.4% increase ex transport. The rise is likely to be led by civil aircraft in a rebound from a weak December, though we expect orders ex transport to sustain a recent improvement in trend.
Aircraft led a 2.2% decline in December durable goods orders but were up before seasonal adjustment. Easier seasonal adjustments in January should allow aircraft to see a substantial bounce. We also expect a rise in defense, which has a large overlap with transport, after slippage through Q4. We expect autos to be near neutral.
Four of the last five months have seen gains ex transport and stronger ISM manufacturing new orders is a positive signal, though the ISM data appears to be catching up with gains already seen in durable goods orders ex transport. We expect ex transport orders to rise by 0.4% in January, only marginally above December’s 0.3% gain that was rebounding from a 0.2% decline in November.
We expect non-defense capital orders ex aircraft, a key indicator of business investment, to rise by 0.4% for a second straight month to deliver a third straight increase. Trend in this series is fairly close to that ex transport, though November’s 0.8% rise saw a significant outperformance.
