US Durable Good Revision Preview: Good but what of retail sales?
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Revision of December durable goods orders
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Initial release was weaker than prediction
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Business spending was negative for the fourth month out of five
The US Census Bureau will issue its revision of December durable goods orders on Wednesday February 27th at 10:00 am EST, 15:00 GMT.
Initial Release
New orders for durable goods were predicted to rise 1.5% at their initial release on February 21st, they came in at 1.2%. Durables orders ex-transport were forecast to be 0.3%, they were 0.1%. Ex-defense orders were projected to be 0.4%, they were 1.8%. Non-defense capital goods ex aircraft and parts, a proxy for business investment spending, were projected to be higher by 0.2% they arrived at -0.7%. The original report was about one month overdue, delayed by the 35 day government partial government shutdown.
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Durable Goods: Effects of the government shutdown
This report covers many manufactured products designed to last three years or more in use. The category ranges from microwave ovens to computers, cell phones through construction equipment and commercial airliners. The orders give a wide image of consumption and investment in the economy. The December number is a component of the holiday spending and the year-end profit of many retail firms.
The December durable goods orders did not seem to have the reporting problems that were suspected of skewing the retail sales numbers well below their projections.
Retail sales for December from the Census Bureau were uniformly weaker than expected. Overall sales were down 1.2% against a forecast for a 0.2% increase. The control group category which is used by the Bureau of Economic Analysis to calculate GDP was -1.7%, far below the prediction for a 0.4% gain.
The Commerce Department noted in reference to the sales numbers that "data collection and processing were delayed."
The retail figures for December contrasted to both the long term trend in employment and wages and to private company and survey sales numbers for December.
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