Sept Durable Goods was about in line with expectations both headline and ex transports. Orders rose by 1% and were up .9% ex transports. Non Defense Capital Goods ex Aircraft were up 2% after the prior two months of declines. Orders for vehicles and parts in particular fell .1% after the two prior month gains. The core gain in orders was led by a 7.9% rise in machinery. Computers/electronic orders fell for a 2nd month. Shipments, which get directly plugged into the GDP calculation, rose .8% and are up for all of Q3, thus contributing to the Q3 GDP rebound which we will see confirmation tomorrow. Inventories fell again and the inventory to shipments ratio is down to 1.77 from 1.80 to the lowest level since Oct ’08. The moderation in the inventory decline in Q3 relative to Q2 will also provide a statistical boost to Q3 GDP. The Q3 GDP rebound is old news now and thus sustainability is the open question.

Category: MacroNotes

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