Highlights
Today's headline number for durables disappointed a bit but ex-transportation showed broad-based strength. New factory orders for durable goods in August dipped 1.3 percent, following a 0.7 percent rebound in July. The August decline was somewhat more negative than analysts' projection for a 1.0 percent decrease. . July's figure was an upward revision from the prior estimate of a 0.4 percent increase from the full factory orders report (initially up 0.3 percent in the July advance). Excluding transportation, new durables orders gained 2.0 percent, following a 2.8 percent drop in July.

The reversal in overall orders in August was led down by the transportation component which dropped 10.3 percent, following an 11.6 percent boost in July. Nondefense aircraft plunged a monthly 40.2 percent after surging 69.1 percent the month before. Defense aircraft orders slipped 2.7 percent in August while motor vehicles declined 4.4 percent.

Other components generally posted healthy gains. Primary metals were up 2.4 percent; fabricated metals, up 1.0 percent; machinery, up 3.9 percent; computers & electronics, up 3.8 percent; electrical equipment, up 0.5 percent; and "other," up 0.1 percent.

Business investment in equipment is on a volatile uptrend. Nondefense capital goods orders excluding aircraft in August rebounded 4.1 percent, following a 5.3 percent fall in July. Shipments for this series advanced 1.6 percent in August after edging up 0.1 percent the month before.

Year-on-year, overall new orders for durable goods in August improved to up 11.2 percent from 9.7 percent in July. Excluding transportation, new durables orders came in at up 12.9 percent, compared to 10.6 percent the previous month.

The good news is that today's durables report shows manufacturing gaining strength outside of transportation-and businesses still investing in equipment. On the release, equity futures nudged up but essentially were little changed. But stock futures then gained traction after taking time to digest the numbers.

Market Consensus before announcement
Durable goods orders in July rebounded a revised 0.4 percent, following a 0.2 percent decline the prior month. Unfortunately, strength is narrowly focused for the month. Most of new orders strength came from transportation which jumped a revised 12.9 percent, following a 1.1 percent decrease in June. Nondefense aircraft spiked 75.9 percent after falling 25.3 percent in June. Most other components slipped. Excluding transportation, new durables orders dropped a revised 3.7 percent, following a 0.2 percent rise in June. Looking ahead, precursor indicators on orders are mixed. The ISM new orders index for August was barely in positive territory at 52.4 (breakeven of 50). For the same period, the Philly Fed and New York Fed new orders indexes were both negative at minus 7.1 and minus 2.7, respectively (breakeven of zero). However, the manufacturing survey indexes include nondurables in addition to durables.

2010 Release Schedule

Released On: 1/28 2/25 3/24 4/23 5/26 6/24 7/28 8/25 9/24 10/27 11/24 12/23 Release For: Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov