U.S. factory orders grow above expectations in September

U.S. factory orders recorded further strong growth in September, rising 1.4 percent sequentially. Factory orders came in slightly above consensus expectations of 1.2 percent rise. Barclays had expected a strong showing in September, given the strong recovery in September durable goods orders, which is incorporated in the forecast, noted Barclays in a research report.

The miss relative to the expectation came from non-durable goods orders that grew 0.8 percent sequentially, the highest monthly growth since September 2016. Meanwhile, the durable goods orders for September were downwardly revised by two-tenths to 2 percent in the final estimate. But most of this revision seems to have come from the non-core categories, as core capital goods orders and shipments were upwardly revised.

Overall the report released today was above expectation, and along with upward revisions to core durable goods orders and shipments, stimulated the equipment investment tracking estimate. Moreover, manufacturers’ inventories were higher than expected and suggest a larger contribution from the inventories sub-component to third quarter GDP growth, added Barclays.

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