Capital Goods Orders Up 22.2% in February


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Nominal total capital goods new orders were up 22.2% in February compared to February 2009. This is the second straight month of sizable month-over-month gains in capital goods orders. Because the inflation factor I use for this data has not been released yet I don’t have the value of real total capital goods new orders for February yet. But, it won’t make much difference in comparing February 2010 to February 2009. However, it does make a difference over time and when comparing data using rate of change curves. The chart shows real total capital goods new orders (about $61,600 million in real dollars in February) and the 12-month rate of change for these orders. New orders are quite volatile because of the aircraft industry. The rate of change curve shows that on annual basis new orders are still contracting but they are contracting more slowly. Real total capital goods new orders are a good leading indicator for durable goods excluding motor vehicle and parts industrial production (essentially capital goods industrial production). You can see how I use total capital goods new orders to forecast the metalworking industry here.