Login

Durable Goods Orders Down 0.8% Due to Aircraft: Inventories Up 18 Months

Aircraft orders have been swinging wildly, falling 27.1% in April leading to a deeper than expected headline decline.

The Census Bureau report on Manufacturers’ Shipments, Inventories, & Orders shows new orders declined 0.8% vs an Econoday consensus of 0.4%.

March was revised slightly higher, from +1.6% to +1.7%.

Summary

  • New orders for manufactured goods in April, down following two consecutive monthly increases, decreased$4.0 billion or 0.8 percent to $494.4 billion, the U.S. Census Bureau reported today. This followed a 1.7 percent March increase.
  • Shipments, up eleven of the last twelve months, increased $0.1 billion or virtually unchanged to $492.8 billion. This followed a 0.7 percent March increase.
  • Unfilled orders, up five of the last six months, increased $5.4 billion or 0.5 percent to $1,153.1 billion. This followed a 0.8 percent March increase. The unfilled orders-to-shipments ratio was 6.73, up from 6.66 in March.
  • Inventories, up eighteen consecutive months, increased $2.2 billion or 0.3 percent to $666.9 billion. This followed a 0.2 percent March increase. The inventories-to-shipments ratio was 1.35, unchanged from March.

Spotlight on Inventories

  • Inventories of manufactured durable goods in April, up seventeen of the last eighteen months, increased $1.3 billion or 0.3 percent to $401.9 billion, unchanged from the previously published increase. This followed a 0.2 percent March increase.
  • Fabricated metal products, up fifteen of the last sixteen months, led the increase, $0.4 billion or 0.8 percent to $52.0 billion.
  • Inventories of manufactured nondurable goods, up ten consecutive months, increased $0.8 billion or 0.3 percent to $265.0 billion. This followed a 0.1 percent March increase.
  • Chemical products, up six of the last seven months, led the increase, $0.4 billion or 0.5percent to $87.8 billion.
  • By stage of fabrication, April materials and supplies increased 0.5 percent in durable goods and increased 0.3 percent nondurable goods. Work in process increased 0.5 percent in both durable goods and nondurable goods. Finished goods decreased 0.1 percent in durable goods and increased 0.2 percent in nondurable goods.

Manufacturers are clearly stockpiling inventories.

The inventory build does not appear to be tariff-related accumulation since it has been going on for 18 months overall and 17 of eighteen months for durable goods.

Mike "Mish" Shedlock

Stories