The headline, at a monthly zero percent, is flat and so are the
indications from the bulk of the August durable goods report. Excluding
transportation, orders slipped 0.4 percent. This reading excludes a 22
percent downswing in civilian aircraft orders that is offset in part,
however, by a solid 0.7 percent gain for vehicle orders. Readings on
core capital goods (nondefense excluding aircraft) are mixed with orders
up 0.6 percent, which points to shipment strength ahead, but current
shipments are down -0.4 to extend a long string of declines going back
to May. The weakness here in shipments is a negative for business
investment in the GDP report.
Aside from vehicles and a strong gain for defense capital goods, good news is hard to find in today's report. Total shipments are down 0.4 percent following no change in July while unfilled orders, which last posted a gain in April, fell 0.1 percent. Inventories did fall, down 0.1 percent, but not enough to keep the inventory-to-shipments ratio from rising to a less lean 1.66 from July's 1.65.
Another negative in the report is a downward revision to July where the gain in total orders is shaved 8 tenths to 3.6 percent. But July was still a very strong month and the August results, though flat, are better than expected. Still, the data point to more of the same for the factory sector, a flat trajectory reflecting weakness in global demand and specific weakness in business investment.
Aside from vehicles and a strong gain for defense capital goods, good news is hard to find in today's report. Total shipments are down 0.4 percent following no change in July while unfilled orders, which last posted a gain in April, fell 0.1 percent. Inventories did fall, down 0.1 percent, but not enough to keep the inventory-to-shipments ratio from rising to a less lean 1.66 from July's 1.65.
Another negative in the report is a downward revision to July where the gain in total orders is shaved 8 tenths to 3.6 percent. But July was still a very strong month and the August results, though flat, are better than expected. Still, the data point to more of the same for the factory sector, a flat trajectory reflecting weakness in global demand and specific weakness in business investment.
Recent History Of This Indicator:
Durable goods orders jumped 4.4 percent in July with ex-transportation up an outsized 1.5 percent, gains however that are not expected to be repeated in August. On the contrary, forecasters are calling for a 1.9 percent decline with ex-transportation down 0.5 percent in results that would underscore the factory sector's flat trajectory. Special attention will be focused on core capital goods where orders did pick up in the last report though shipments, which are an important input into GDP, fell back for a third straight month.
Durable goods orders jumped 4.4 percent in July with ex-transportation up an outsized 1.5 percent, gains however that are not expected to be repeated in August. On the contrary, forecasters are calling for a 1.9 percent decline with ex-transportation down 0.5 percent in results that would underscore the factory sector's flat trajectory. Special attention will be focused on core capital goods where orders did pick up in the last report though shipments, which are an important input into GDP, fell back for a third straight month.
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