Orders for U.S.-manufactured durable goods (items meant to last at least three years) rose in September by $2.0 billion (0.8 percent) to $262.1 billion, according to new data from the Census Bureau. That was significantly better than the 1.5 percent decline economists anticipated, and the August gain was revised slightly higher. However, most of the headline strength was due to a one-time spike in orders for military aircraft, while “core” durable goods orders, which exclude the volatile transportation component, lifted by just 0.1 percent in September. That was well below the 0.4 percent forecast, but the prior month’s figure was revised higher.
Further, orders for nondefense capital goods excluding aircraft, i.e. core capital expenditures, an important proxy for U.S. business investment, slid by 0.1 percent in September. That was significantly worse than the 0.5 percent gain economists expected and the second monthly decline in a row. Although far from a terrible report, the latest durable goods data was weak enough to cause the Federal Reserve Bank of Atlanta to lower its third quarter U.S. gross domestic product (GDP) growth forecast to 3.6 percent. That would be a slowdown from Q2’s 4.2 percent increase but still consistent with the recent seasonal pattern. The government’s first official estimate of Q3 GDP growth will be released tomorrow morning.
Sources: Econoday, U.S. Census Bureau, FRBA, FRBSL
Post author: Charles Couch