U.S. durable goods orders rise strongly on sequential basis in September

Durable goods orders in the U.S. grew strongly on a sequential basis in September. The goods orders rose 2.2 percent, coming in above consensus expectations of a rise of 1 percent. The rise in orders was mainly driven by capital goods, which rose strongly by 5.9 percent sequentially. In the capital goods category, the volatile non-defense aircraft orders led the rise, growing 31.5 percent, which is the second strongly monthly rise after the outsized drop seen in July 2017.

At the core level, capital goods orders grew strongly by 1.3 percent, while the August print was upwardly revised by two-tenths to 1.3 percent. The performance of other categories was mixed. Computers and fabricated metals rose on the month, whereas electrical equipment, machinery and primary metals orders declined modestly. Capital shipments grew strongly by 0.7 percent sequentially, while the August figure was upwardly revised by one-tenth.

“Core data on capital goods orders and shipments are a key input to the BEA’s estimate of equipment investment in GDP, and we see the data as consistent with an improvement in business investment in Q3. Better-than-expected data on both orders and shipments, coupled with upward revisions to the August numbers, boosted our equipment investment tracker to 5.9 percent q/q saar”, noted Barclays in a research report.

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