Durable Goods Orders Signal a Struggling Industrial Sector

Durable Goods Orders are compiled from results of the U.S. Census Bureau's Manufacturers' Shipments, Inventories, and Orders survey. This survey provides data on manufacturers' value of shipments, new orders, end-of-month unfilled orders, end-of-month total inventory and inventories by stage of fabrication. According to the US Census Bureau, Durable Goods Orders in January decreased 4.0 percent, which was lower than the -1.0 percent estimate. Core Durable Goods Orders (ex-transportation) also decreased more than expected, reading -3.2 percent versus a 0.0 percent estimate. This is essentially bearish for the manufacturing sector and negative for general economic growth in the United States. US equity futures spiked lower on above average pre-market trading volume after this poor reading in the manufacturing sector. According to the report, new orders for manufactured durable goods in January decreased $8.6 billion or 4.0 percent to $206.1 billion, the U.S. Census Bureau announced today. This decrease, down following three consecutive monthly increases, followed a 3.2 percent December increase. Excluding transportation, new orders decreased 3.2 percent. Excluding defense, new orders decreased 4.5 percent. Transportation equipment, down following two consecutive monthly increases, had the largest decrease, $3.6 billion or 6.1 percent to $55.2 billion. This was due to nondefense aircraft and parts, which decreased $3.8 billion.