November Capital Good Shipments

December 23, 2005 – Real non-defense capital good shipments excluding aircraft were unchanged in November following a strong 1.8% October increase (Chart 1).

Chart 1. Real shipments of non-defense capital goods excluding aircraft. Monthly and three-month moving average percent change. January 2000 through November 2005.

Growth in these shipments averaged 0.3% per month for the three months through November, compared to a 1.1% average monthly gain for the three months through October.

Despite this recent slowing, the broader trend remained robust. Compared to the same month last year, real non-defense capital good shipments excluding aircraft rose by 7.8% in November, accelerating from a 5.6% year-ago gain in October (Chart 2).

Chart 2. Real shipments of non-defense capital goods excluding aircraft. Year-ago percent change. January 1969 through November 2005.

As of November, Q4 real non-defense capital good shipments excluding aircraft were rising at a 9.5% annual rate, compared to their Q3 average (Chart 3). For Q3 as a whole, these shipments rose at a 1.8% annual rate.

Chart 3. Real shipments of non-defense capital goods excluding aircraft. Percent change at annual rate. Q1 2000 to date.

Bottom line: Even with November’s slowing, these data continue to suggest sturdy growth in real business fixed investment in equipment & software in Q4.

Suzanne Rizzo

Sources:

U.S. Department of Commerce, U.S. Census Bureau (http://www.census.gov) - manufacturers’ shipments of non-defense capital goods excluding aircraft.
U.S. Department of Labor, Bureau of Labor Statistics (http://www.bls.gov) - the Producer Price Index (PPI) for finished capital goods (used to calculate real shipments).
U.S. Department of Commerce, Bureau of Economic Analysis (http://www.bea.gov) - real business fixed investment.
National Bureau of Economic Research (http://www.nber.org) - recession dates.