U.S. September Durable Goods Orders - Some loss of underlying momentum in Q3
September durable goods orders are in line with expectations, up by 1.8% overall and 0.5% ex transport. The ex transport trend remains positive but has lost some momentum in Q3 after a very strong Q2.
Orders ex defense were stronger at 2.2%. Defense capital orders have now seen three straight declines after surging in March and April, but remain well above pre-war levels.
Defense has a large overlap with transport. The transport rise was led by aircraft as a strong month from Boeing’s data had implied. Autos saw a marginal rise of 0.3% after a 0.8% August decline.
Non-defense capital orders ex aircraft, a key indicator of business investment, matched the 0.5% ex transport increase. Shipments in the sector saw a strong rise of 1.7% after a 1.3% August decline, which is supportive for Q3 GDP, though a 0.3% rise in inventories is a 3-month low.
