New orders for manufactured durable goods in August decreased $2.5 billion or 1.3 percent to $191.2 billion, the U.S. Census Bureau announced today. Down three of the last four months, this decrease followed a 0.7 percent July increase. Excluding transportation, new orders increased 2.0 percent. Excluding defense, new orders decreased 1.2 percent.
So transports went through the floor.
Inventories were up too, although again most of it was in transports. Meh.
Nondefense new orders for capital goods in August decreased $0.6 billion or 0.9 percent to $64.9 billion. Shipments decreased $0.2 billion or 0.3 percent to $65.4 billion. Unfilled orders decreased $0.5 billion or 0.1 percent to $487.2 billion. Inventories increased $1.1 billion or 0.8 percent to $130.8 billion.
New orders down materially too. Heh, so much for the so-called expansion, right?
July was revised up, so the numbers actually are better than they appeared - by a small amount, except for inventories which were revised down.
Interestingly enough orders and shipments for computers were up materially. This could pole-axe people if this is into the holiday season, as we have continued to hear reports of softer than expected demand from the people who know, with AMD coming out with a warning last night (and which amusingly caused their stock to move higher after-hours, and in the premakret today.) The new order pace is particularly troubling in this sector - there are some really big bets being placed for the coming months for sales, with a 12% new order increase (!) in computers and a 9.2% increase in orders for communications gear (!!!) Indeed, about a third of the entire increase in new orders came from this one sub-sector.
Among non-categorized durables the increase was 0.1%.
Order backlog was down overall, but inventories up. That's code for "more slack in the system". Ex-transports, however, unfilled orders and inventories increased, so call that a push.
The market reaction was sharp, up nearly 1% on the number release. On a flat report, and one where transports fell through the floor?
Ok boys.... obviously the market was "expecting" something materially worse. We're likely to see more panic today in the trade, although one wonders how rational this really is, given the views expressed on CNBS for the last three days that have pretty much hinged their expectations on the view that The Fed would be coming in with more "QE".
These numbers don't support that view at all, which of course is why CNBS trotted out David Tepper who basically said (and you could see the futures move on his spew) "If the economy gets better, stocks will go up. If the economy gets worse, The Fed will QE and stocks will go up."
Uh huh. No matter what happens, stocks will go up. (This is amusing similar to the Realtard's pronouncement that "The housing bubble will not bust", right before the levitating house fell on your head and destroyed not only you, but the broader economy as well.) It also provides him with the ability to avoid having to explain why he believes the economy will improve, as the question doesn't have to be asked - and it wasn't.
Perhaps Mr. Tepper can explain why Japan, which has been QEing for 20 years, is trading at about 1/3rd of their market peak, if that premise has any validity?
Of course CNBS didn't ask that question.
They never do.