|
Highlights
Today's lesson in economics is that durables orders are volatile-no, actually really volatile. And manufacturing still appears to be on a soft trend after sorting through the detail. New factory orders for durables rebounded a monthly 9.9 percent in September after a sharp 13.1 percent plunge in August (originally down 13.2 percent monthly). The market consensus was for a 7.0 percent boost. The comeback was largely due to aircraft orders within the transportation component-where weakness was in August. Excluding transportation, orders rose 2.0 percent after decreasing 2.1 percent in August (originally down 1.6 percent). Analysts projected a 1.0 percent rise in September orders excluding transportation.
Civilian aircraft (Boeing) has really jerked around the total and especially the transportation component. The transportation component rebounded a monthly 31.7 percent after a 33.7 percent plummet in August. Next, civilian aircraft orders were "extremely" low in August due to cancellations, setting up an extremely low baseline for September. Now, the punch line-civilian aircraft orders surged a monthly 2,640.7 percent (that is not a typo). But the issue was an extraordinarily low baseline for August.
For other subcomponents in transportation, motor vehicles slipped 0.4 percent after falling 11.6 percent in August. Defense aircraft jumped 27.2 percent in September, following a 1.4 percent dip the prior month.
Outside of transportation, new orders were mixed. Gains were seen in primary metals, machinery, and "other." Declines were seen in fabricated metals, computers & electronics, and electrical equipment.
Business investment is looking flat outside of aircraft. Orders for nondefense capital goods excluding aircraft were unchanged in September, following a 0.2 percent rise in August and a 5.6 percent drop in July. The equipment investment component in GDP for the third quarter is not looking good. Shipments for nondefense capital goods excluding aircraft slipped 0.3 percent in September, following a 1.2 percent decrease the prior month.
Today's numbers topped estimates for the headline and ex-transportation. But when smoothing the volatility, manufacturing is still very soft.
|
|
Market Consensus before announcement
Durable goods orders plunged a whopping 13.2 percent (monthly) in August after a revised 3.3 percent boost in July. Excluding transportation, orders dipped 1.6 percent, following a 1.4 percent rise in July. The transportation component fell 34.9 percent after a 13.2 percent gain in July. Weakness was broad based outside of transportation with declines seen in all major industries except one. Electrical equipment rebounded in August. Numbers reflect revisions from the more recent total factory orders report.
|
![[Econoday]](images/logo.gif){kind=logo}