December Core Capital Goods Plunge 4.3% Y/Y As Durables Headline Boosted By Boeing Orders

Yet another government data release, yet another epic case of baffle with BS. As expected (and as pretweeted by us) The headline Durable goods orders was a massive 4.6% increase M/M, rising to $230.7 billion from $220.7 billion, the biggest beat to expectations of a 2.0% headline print since December 2011. A key reason for this was the ridiculous 56.4% explosion in Nondefense aircraft and part from $5.1 billion to $7.9 billion, while Nondefense aircraft soared by 10.1% to $14 billion. Excluding this incredibly volatile data set, the headline number would have been a miss, and will likely be revised lower next month, because the primary driver of the boost was Boeing, which said it had received 183 orders in December, compared to 124 in November. One wonders how many of these fully cancelable orders were for the Dreamliner. Ah details.

And more details: the only consistent series that matters for a credible Capital Expenditure picture without monthly aberations, is the orders of Non-defense Capital Goods excluding Aircraft category, which rose by a whopping 0.2% month over month. But more importantly, looking at this on a Year over Year basis, as this is a seasonal series and looking at it on a sequential basis makes zero sense, we just experienced a whopping -4.3%, negating the transitory 1.5% Y/Y bounce posted in November, and resuming the downward glideslope in the key corporate CapEx indicator.

To summarize: corporate capital spending has yet to pick up.

Source: The always amusing Census Bureau