September durable goods orders data are out.
Total orders rose 3.7%, above expectations for a 2.3% gain. August order growth was revised up to 0.2% from 0.1%.
Orders of durable goods excluding transportation, however, fell 0.1%, versus expectations for a 0.5% rise. August order growth was revised down to -0.4% from -0.1%.
Orders of nondefense capital goods excluding aircraft (a.k.a. “core capex”) also unexpectedly fell 1.1%. Economists were looking for a 1.0% advance. August core capex growth was revised down to 0.4% from 1.5%.
Shipments of nondefense capital goods excluding aircraft fell 0.2%, versus expectations for a 1.1% rise. This number is figured into the calculation of GDP. August shipment growth was revised down to 1.3% from 1.1%.
The headline number was boosted by a 57.5% rise in orders of aircraft and parts.
Despite the drop in core orders and shipments, the trend remains healthy for now.
The chart above shows the year-over-year change in the 3-month moving average of core capex, which Gluskin Sheff chief economist David Rosenberg says is one of his favourite warning signs of an imminent recession (when the number goes negative). He says it’s the purest look at what companies are doing with their cash.
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