Durable Goods Not Even in Same Ballpark as GDP

Ryanair Boeing 737The third-quarter gross domestic product (GDP) may have blown estimates out of the water, but the more recent durable goods report looked awful on the headline reading for November. This leading indicator has fallen on tough times in the past few months after surging in the summer months. However, on the year thus far, durable goods orders are 6.7% higher than they were at the same time last year.

As a reminder, durable goods is one of the most volatile reports that the economic watchers see each month.

The U.S. Department of Commerce released the number for durable goods as 0.3%, against a Bloomberg consensus estimate of 3.1%. This was down 0.1 percentage point from October's number of 0.4%. The Wall Street Journal predicted a 3% rise in new orders.

The reading ex-transportation was -0.4%, compared to the consensus estimate of 1.3%, and the reading in October was revised to -1.0% from -0.9%.

In November, the decline in new durable goods orders was the third time within the past four months that the reading has fallen. The leading segment for November's decline was defense and aircraft orders. Defense-aircraft orders fell 7.8% in November, after increasing a whopping 43.5% in October.

The core durable goods is the non-defense capital goods excluding aircraft, and this reading was flat in November. That is another slow month on the true core reading of durable goods.

Equity futures have risen, keying off of the strong GDP reading rather than dwelling on one month's volatile reading from November.

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