Durable Goods Big Miss -4%, Expected -1%, Biggest Sequential Drop Since January 2009

Tyler Durden's picture

And so the transition to the QE3 "economic disappointment" regime begins. Because after the ECB is done with the LTRO it's over for global QEasing, and the Fed is next. Remember- Bernanke's semiannual testimony to Congress is tomorrow. Whatever will he say....

  • Headline Durable Goods plunges from +3.2 to -4% on expectations of -1%
  • More painfully, Durable goods non-defense ex aircraft down a whopping -4.5% on Exp of -1.3%, down from +3.4%.

Digging between the numbers, via Bloomberg:

  • Decline in shipments of non-defense capital goods, ex. aircraft, suggests “weak business investment” for 1Q GDP report, says Bloomberg economist Rich Yamarone  
  • Overall decline "mostly" due to contraction in civilian aircraft orders, "slightly" slower pace of new motor vehicles bookings, defense orders, says Bloomberg economist Joseph Brusuelas   
  • Slowdown ex. transport "consistent with the broader slowdown in growth in industrial production"  

And a recap from Stone McCarthy:

January new durable goods orders were reported down 4.0%, following a slight upward revision in December to up 3.2% (previously +3.0%). The January performance was below most expectations, and reflected widespread softness across components, not just the expected drop in transportation due to a decline in civilian aircraft orders. Although the fall in new orders was steep, it was also after two months of solid gains. Since these numbers tend to see-saw from month-to-month, a one-month decline is should not be worrisome. Strong orders for civilian aircraft in February are likely to boost the next month's report.


Expectations in a Bloomberg survey centered for a 1.0% decline. Estimates fell across a range of down 4.3% to up 1.5%. Our forecast was for a decline of 1.8%.


Transportation orders were anticipated to fall in January due to fewer civilian aircraft orders. Boeing reported 150 new orders for the month, which was a drop of 137 from the prior month Overall orders for transportation equipment were down 6.1%, with declines of 19.0% in nondefense aircraft and 5.6% in defense aircraft. Motor vehicle orders rose 0.9%, reflecting the steady demand for new autos and trucks.


Nonetheless, new orders excluding transportation were still down 3.2%. There were notable declines in primary metals (-6.7%), machinery (-10.4%), computers (-10.1%), and electrical equipment (-1.9%). With the exception of computers, these were all higher in the prior two months, so this is consistent with the direction of total new orders. There was a modest gain of 0.7% for fabricated metals and communications equipment of 1.4%.

Visually, this is the biggest decline since January 2009.

Source: Census Bureau

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
ShortTheUS's picture

Let's pare some gains, bitchez!!!

slaughterer's picture

Op robo-kill entering phase 2 now. 

TruthInSunshine's picture

This isn't possible.

The Geithner, Brian Wesbury, Warren 'Taxpayer Buffet' Buffett, Mark Zandi, Barton 'Smally' Biggs, Joe LaVorgna, Abby Joseph/Sacha Baron Cohen, and the real legends of prognositication, James Altucher, Joe Wiesenthal & James Glassman all said so.

Recovery Summer 3.0?

Sudden Debt's picture



It would have....


It should have...


but it didn't....


krispkritter's picture

Recovery Bummer 3.0?  IT spending seems off across the board with my clients.  Locally(FL Suncoast) businesses that produce for the Global market are either hiring or expanding manufacturing out of the local airport park but two other small businesses in the medical and electronics areas shuttered in the past 4 months. What equipment clients are buying they are asking me to source it used as so much is available on the secondary market. I don't see much of anything happening in my area that looks like a Recovery.  And food and gas along with animal feeds are up significantly which hurts alot of locals. People are giving away livestock or abandoning it if you look at CL.

midtowng's picture

I'm sure this is bullish for some reason that I haven't figured out yet.

I am more equal than others's picture

Its a durable depression.  Onward and upward because those inflated dollars mean ever increasing profits.  Right?

bdc63's picture

Nothing to see here .... move along .... get your sunglasses out 'cause our future is bright ...

JPM Hater001's picture

Call Cramer quick!  I need to know what to short.

schismjism's picture

one wonders how much horse shit they will keep telling us about oil speculators causing the high oil prices...    


Gully Foyle's picture

How many goods are actually durable these days?

Sir Real's picture

I think they meant "adorable"

Like my new adorable refrigerator that is a piece of #$%.

Cdad's picture

Completely "priced in"...in 4...3...2...

SheepDog-One's picture

Gotta reach DOW 14,300 for the Emperor...nothing else matters of course.

Caviar Emptor's picture

As long as our headline number looks good, then national pride and security are intact

Chump's picture

Futures are yawning.

nantucket's picture

so a neg was expected (i beleive some capital investment tax credits expired 12-31-11), but was there anything else we need to weed out of the data or is that miss "clean"?

JPM Hater001's picture

There was a stiff wind that hit the east coast and slowed down production.

Total one off.

TruthInSunshine's picture

There will be a statement soon that the previous 1% decline that had been forecasted has been revised down, after the actual release, to a 10% decline, thus making today's 4% decline (i.e. 6% better than the post-release revised forecast) an extraordinarily shocking upside surprise.

We're going to need Greece to ramp up their purchases of our exports.

Cursive's picture

Who needs durable goods? If the AAPL model is any indication, nothing should last more than a year or two before requiring an upgrade.

roadhazard's picture

"Would you like to buy a one year warranty with that brand new product?"

AU5K's picture

ES ticked down 2.5 pts last tuesday, so this was already well priced in.

Ruffcut's picture

I love when a recovery comes together. Everbody buy a toaster or something and keep this party going.

Taterboy's picture

My previous toaster didn't make a year. Not to durable.

Atomizer's picture

The road to recovery is going well.

zx12r's picture

It's pretty hilarious to me, that the White Hut propaganda machine, AKA: ABC, NBC, CBS, CNN etc. keeps running with stories that disingenuosly proclaim that the economy is indeed recovering, when no one observing the real world buys it for one second. Most people know that reports of the so called recovery, are something to point at and be sarcastic about (like you). If gas prices do reach $5.00 a gallon or more this summer, we will quickly fall into another deeper substratum of recession, if not depression. People will strengthen their already (saving) approach to our economic future. Until Obama is dragged out of office, and replaced with his mirror opposite, the economy will be at risk of unrecoverable status, and most understand that, and are in fear of it.

Cursive's picture


Yes, people are foregoing rent AND a washer and dryer. People ate resorting to a bar of soap and the bathtub or sink.

Clueless Economist's picture

After consulting my economics texts, charts, and formulas, I can say with conviction...Rut Roh Raggy....err I mean we need a gigantic stimulus of $5 Trillion NOW.

JPM Hater001's picture

Are you sure that's big enough.  Better make it 8...I mean it's only monopoly money after all.

Dr. Engali's picture

Hmmm my numbers come out to eleventy trillion. You need to update your models.

LawsofPhysics's picture

My numbers say at least 707 trillion.

boiltherich's picture

Come on LOP, that is a tad high, I mean we can't have any leak out to Main Street lest it trigger inflation that can't be erased from the price stats can we? 

GeneMarchbanks's picture

Ridiculous, since when is 5 Tril 'gigantic'?

Dow 36000's picture

This means stocks go up...right?

JPM Hater001's picture

Correct.  They will also be delivering your Unicorn eggs...I shipped overnight for before 10 AM delivery.

Christoph830's picture

Disagree. Ben needs risk assets (most notably oil) to sell off before he can implement more QE.

mayhem_korner's picture



Ben doesn't need to implement more QE with Dow 13,000 and the ECB printing like mad.  He's doin' his part with the Twist and the discounted currency swaps with Europe.

Very, very difficult for the complex to get oil and PMs tamped down without diffusing the hopium of the equities. 

Big question is whether ISDA lets the CDS underwriters or buyers hold the bag come Mar. 20th...and then how fast is the sinkhole filled with fiat and where do the liquidations come from - equities, commodities, or elsewhere? 

vh070's picture

Yup, up is the new down.

Scalaris's picture

" Cyclical Trends "

krispkritter's picture

That's the spinning effect introduced by the toilet bowl we're in...there's a goldfish and a dead hamster in here too. Bully!

Dr. Engali's picture

It's amazing how these numbers just happen to come in soft or strong depending on what the fed needs for either cover to ease or proof that their policies are working.

mayhem_korner's picture



Sawtooth pattern suggests a lot of "play" in the reported values.  Not sure it helps illuminate reality.