Finally, a Good Durable Goods Report

Durable goods were up by 3.0% on an ex-defense basis, and they were up 0.3% on an ex-transportation basis.

Nondefense new orders for capital goods in January increased by $6.9 billion, or 9.5%, to $79.8 billion. The critical measure is the true core of durable goods — nondefense capital goods excluding aircraft rose by 0.6%.

Shipments of manufactured durable goods in January, which had been negative for three of the last four readings, were down $2.7 billion, or by 1.1%, to $245.1 billion. The drop was led by transportation equipment. This followed a 1.5% gain in December.

December’s bad headline reading on durable goods was originally -3.3%, and that was revised even a tad lower to -3.7% for the month. The ex-transportation reading for December was revised to -0.9% from -0.8%.

Durable goods is so volatile because it includes the big-ticket orders that the consumer and enterprise market purchases. That volatility makes some economists tend to discount the report, but the numbers here are so large each month that they almost certainly have to be looked at for a good judgment of the broader economy and for trends in gross domestic product.

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