On October 25, The Commerce Department reported that durable goods orders slid by 0.8% in September.
Orders for non-defense aircraft and parts fell by 22.7%, while orders for defense aircraft and parts saw a 23.7% decrease.
Orders for transportation equipment decreased by 3.1% in September, a little less than the 3.4% decrease reported in August.
Excluding the slump by orders for transportation equipment, durable goods orders rose by 0.4% in September after climbing by 0.6% in August.
"Durable goods spending is an ongoing soft spot in an otherwise solid economy," said Oren Klachkin, an economist for Nationwide. "Non-tech capital outlays aren’t a priority for businesses right now as they face high borrowing rates, soft demand, and elevated domestic and global uncertainties. Manufacturing remains in a slump and relief isn’t coming for some time."
Oren offers this analysis:
- A decline in core shipments counterbalanced good news from a rise in core orders. Core shipments declined 0.3% m/m in September and added to losses in August and July. Our tracker indicates real equipment spending contracted once again in Q3. Furthermore, a weak handoff sets spending up for a soft Q4. Meanwhile, core orders posted a 0.5% m/m gain as they built on August’s increase.
- Unfilled orders excluding transportation, our preferred measure, continued to essentially trend sideways. Soft and hard manufacturing data suggest the factory sector’s travails won’t ease in the near future. US firms will continue to carefully manage their expenses and want to avoid overly padding their stocks even amid solid domestic demand.
