Preview: Due December 23 - U.S. October Durable Goods Orders - Transport to slip, but ex transport trend positive
We expect October durable goods orders to decline by 2.0%, though ex transport we expect a sixth straight increase, by 0.4%.
Transport is likely to see a significant dip, with Boeing orders weaker in October, auto sales softer and defense (which has a large overlap with transport) likely to correct from a strong September. Ex-defense we expect a decline of 1.5%.
The ex-transport series has seen a significant improvement in trend with the 6-month average now 0.5% compared with 0.0% in March. A 0.4% rise ex transport would however be the slowest since June, with Q3 strength difficult to fully sustain.
We expect non-defense capital orders ex aircraft, a key indicator of business investment, to outperform the ex-transport series for a third straight month, though our forecast of 0.7% would be a modest slowing from 0.9% in both August and September.
