New orders for manufactured durable goods in September decreased $1.5 billion or 0.8 percent to $200.3 billion, the U.S. Census Bureau announced today. This decrease, down three of the last four months, followed a 0.1 percent August decrease. Excluding transportation, new orders increased 1.7 percent. Excluding defense, new orders decreased 1.1 percent.
So it's "better than expected" although negative. I'm especially puzzled by the reaction given the non-defense number, as that's a fairly significant downdraft.
Let's have a look inside...
Primary metals showed a material increase, as did fabricated products. That's a positive. Machinery was also moderately better.
Interestingly, communications and computers were also both up on shipments, and computers were up 6% on new orders. That's not small and is the second consecutive increase. However, communications was mildly down, removing the reversal from last month.
Transport equipment orders were down big, but that series is typically very volatile. The big loser was non-defense aircraft with order volume down 25.5%. Defense aircraft and parts were down a monstrous 33.9%, but last month was up 24.6% - if you like head-spinning volatility, there it is.
Capital goods, non-defense, were down both on orders and shipments. But ex-aircraft non-defense capital orders were up somewhat.
All in all I guess the market reaction is probably justified - it's not a disaster, despite the negative headline. I'm watching the computer orders and shipment numbers - two months does not push the button, but three in a row deserves notice, particularly given the relatively soft general showing in the economy.