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Durable Goods Orders Stall, Only Auto Sales Strong

Posted by Joseph Trevisani on Sep 25, 2013 10:32:00 AM

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New orders for manufactured goods designed to last more than three years barely grew last month and business investment was weaker than anticipated indicating that individuals and companies may be pulling back on their spending plans heading into the final quarter.

Durable goods orders increased 0.1 percent in August boosted by a 2.4 percent surge in automobile purchase, the strongest since February, the Commerce Department reported today. Economists had forecast a 0.2 percent decline. July's goods orders were worse than originally listed, revised down to -8.1 percent from -7.3 percent.

Excluding the transportation sector orders dropped 0.1 percent on a forecast for a 1.0 percent gain and after a revised 0.5 percent fall in July. Demand in the transportation sector can be volatile as it includes civilian aircraft and the order book of Chicago based Boeing Company can swing the figures several percentage points with a large number of commercial jet orders.

Orders for capital good outside of defense department procurement and aircraft climbed 1.5 percent in August, less than the 2.0 percent forecast and following upon an unrevised 3.3 percent drop in July. 

This category, officially called 'capital goods orders nondefense ex aircraft and parts' is a direct part of GDP calculation and is often used as a proxy for business investment  and called 'capex' for short. It was the largest monthly rise in investment since 2.1 percent in May.

Joseph Trevisani

Chief Market Strategist

WorldWideMarkets

Charts: Bloomberg

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