Aircraft orders lifted overall durables sharply in September but ex-transportation components are mixed and net down. New factory orders for durable goods in September rebounded 3.3 percent, following a 1.0 percent decrease in August. The gain in September came in significantly above the consensus forecast for a 1.6 percent boost. Excluding transportation, new durables orders fell back 0.8 percent, following a 1.9 percent increase in August.
By major industries, transportation led orders up, jumping 15.7 percent in September after declining 8.8 percent the prior month. Nondefense aircraft soared a monthly 105.0 percent after dropping 30.0 percent the month before. Defense aircraft orders advanced 30.0 percent in September while motor vehicles slipped 0.4 percent.
Other components were mixed but more down than up. Declines were seen in primary metals, down 0.5 percent; fabricated metals, down 1.6 percent; computers & electronics, down 4.0 percent; communications equipment, down 18.6 percent; and "all other," down 0.1 percent. Gains were seen in machinery, up 2.0 percent, and in electrical equipment, up 0.4 percent.
Business investment in equipment continues to oscillate between positives and negatives due to its inherent monthly volatility and only moderate uptrend. Nondefense capital goods orders excluding aircraft in September slipped 0.6 percent after jumping 4.8 percent in August. Shipments for this series continued to edge up, rising 0.4 percent in September after gaining 1.3 percent the prior month.
Year-on-year, overall new orders for durable goods in September held steady at up 12.2 percent. Excluding transportation, new durables orders eased to up 9.5 percent from 13.6 percent the prior month.
The bottom line is that durables excluding transportation have been typically volatile but essentially flat over the last few months. Growth in manufacturing appears to be slowing at least for the near term. On the news, equity futures declined marginally while Treasury rates were little changed.
Market Consensus before announcement
Durable goods orders for August dipped a revised 1.5 percent, following a 1.2 percent rebound in July. But the underlying trend is back to positive. Excluding transportation, new durables orders gained a revised 1.7 percent, following a 2.1 percent drop in July. This series has risen in three of the last four months and in five of the last seven.