US Q3 GDP tracking 2.3% after July factory orders

Total factory orders grew 0.4% m/m in July, a bit less than we (0.6%) and the consensus (0.9%) had expected, as shipments of nondurable goods fell more than forecast. Durable goods orders are now reported to have grown 2.2% m/m in July, up modestly from the initial estimate of 2.0% in last week's advance report. Much of this increase owes to strong growth in motor vehicles and parts.

Orders for nondurable goods, on the other hand, are estimated to have declined 1.3% m/m in July (previous: 0.4%). Much of this softness was driven by a 7.0% m/m decline in petroleum and coal product shipments; given that these figures are reported in nominal terms, much of this drop likely reflects the decline in energy prices in July.

Core capital goods orders (2.1% m/m, previous: 1.5%) and shipments (0.6% m/m, previous: 1.0%) in July were little revised from their prior estimates. Elsewhere, manufacturers' inventories of nondurable and durable goods both fell 0.1% m/m in July, and non-durable inventories were revised lower in June.

"The revisions to core shipments were minor and left our estimates of equipment investment for Q2 and Q3 unchanged. The downward revision to manufacturers' inventories of nondurable goods in June trimmed our Q2 GDP tracking estimate by one-tenth to 3.7%. Weaker-than-expected growth in this same category in July cut our estimate of overall Q3 inventory investment, pulling our Q3 GDP tracking estimate down three-tenths to 2.3%",says Barclays.