The U.S. Census Bureau announced the advanced figures for Durable Goods (goods that usually have a lifespan of several years like TVs, Cars and appliances). New Orders for manufactured durable goods decreased by 0.5% in April and were down 1.6% compared to the previous year. Economists had expected a 1% drop compared to March. Excluding transportation, new orders increased by 2.5% for the month of April and by 5.2% compared to April 2007. Shipments of manufactured durable goods increased by 1.2% for the month and by 0.3% year over year. Unfilled Orders increased by 1% for the month and 16.0% year over year. Finally inventory increased by 0.5% in April over the previous month and by 4.9% compared to the previous April.
Unfilled orders (unfilled orders are defined as unfilled orders for the previous month plus new orders for the current month less shipped orders) are usually a gauge of future demand. A large increase in unfilled orders occurs when the manufactures can not keep up with demand. However there seems to be a breakdown in the last couple of years. Unfilled orders is at record levels, yet shipments have been declining.
New orders for durable goods is starting to diverge from durable goods without transportation reflecting the effects of the high prices of crude oil.
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