Durable Goods Orders Plunge 7.3%, Nondefense New Orders for Capital Goods Plunge 15.4%; Plunge to Accelerate?

US treasuries rallied a bit again today, with the 10-Year yield down 12 basis points in two days to 2.80% in the wake of a huge plunge in durable goods orders as reported by the commerce department.

New Orders

New orders for manufactured durable goods in July decreased $17.8 billion or 7.3 percent to $226.6 billion

Transportation equipment, down following three consecutive monthly increases, led the decrease, $16.7 billion or 19.4 percent to $69.7 billion. This was led by nondefense aircraft and parts, which decreased $14.5 billion.

Shipments

Shipments of manufactured durable goods in July, down three of the last four months, decreased $0.8
billion or 0.3 percent to $228.8 billion. This followed a 0.1 percent June decrease.

Computers and electronic products, also down three of the last four months, drove the decrease, $0.9 billion or 3.2 percent to $26.6 billion. This followed a 1.1 percent June increase.

Inventories

Inventories of manufactured durable goods in July, up three of the last four months, increased $1.3 billion or 0.4 percent to $379.1 billion. This was at the highest level since the series was first published on a NAICS basis, and followed a 0.2 percent June increase.

Transportation equipment, up fourteen of the last fifteen months, led the increase, $0.7 billion or 0.6 percent to $117.1 billion.

Capital Goods

Nondefense new orders for capital goods in July decreased $14.2 billion or 15.4 percent to $78.0 billion. Shipments decreased $1.0 billion or 1.4 percent to $73.6 billion. Unfilled orders increased $4.4 billion or 0.7 percent to $610.2 billion. Inventories increased $0.6 billion or 0.3 percent to $171.3 billion.

New Durable Goods Orders



New Durable Goods Orders Excluding Transportation



New Durable Goods Orders - Nondefense Capital Goods



Plunge to Accelerate? 

Is this the plunge that accelerates or is another bounce coming?

Given the "unexpected" plunge in new housing and the rise in mortgage rates, I suggest an acceleration to the downside.

For further discussion, please see New Home Sales Plunge 13.4% in July, June Revised Lower; Blame Rising Mortgage Rates; Starts 896,000 - Sales 394,000 - Hmmm.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com