Sept Factory Orders rose .9%, .1% more than expected as transportation orders were revised up from last week’s durable goods report which comprises about half of today’s figure. Non Defense capital goods ex aircraft orders were revised down to a gain of 1.8% from last week’s reading of 2%. Non durable goods orders rose .6%. Durable goods inventories fell 1%, down for a 13th straight month. Non durable goods inventories fell by .9%, lower for the 12th month in the past 13. A smaller rate of decline in the fall in inventories helped to statistically boost Q3 GDP but at some point we will see actual inventory building with when being the only question and end demand helping to determine the degree. With final demand still sluggish, there is little urgency to start adding inventories in the near term (outside of maybe auto’s where levels are extremely low) but a continued reduction in the pace of drawdown’s will help GDP.

Category: MacroNotes

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