Durable goods orders fell by more than expected in October, in both overall and core measures. Total orders fell by 8.3%, nearly erasing the 8.7% increase in September. The median estimate called for a 5.1% drop. Net of transportation equipment, orders fell by 1.7%, much more than the consensus expectation calling for a 0.1% advance. The low estimate from IFR's survey was -0.3%.
As expected, transportation equipment explained much of the October decline. These orders fell by 21.7% in October after jumping 29.9% in September. The other contributing factors were orders for computers and related products. Within this category, communication equipment orders sank by 16.9% and computer orders slumped by 25.6%.
Machinery orders, representing a larger share than computers and related products rose by 1.4%, following a 3.5% gain in September. Primary metals orders rose for the first time in three months and are up 15.6% in the last 12months. Orders for electrical equipment, appliances, and components have now risen 9.7% in the last two months.
Nondefense capital goods less aircraft orders fell by 5.1% in October, the biggest drop since an 8.1% plunge in January 2004. These orders had risen by 4.3% over the prior two months and are yet up 9.7% from the same month a year ago. Nondefense capital goods less aircraft shipments fell by 1.5% last month, adding to a 1.6%decline in the prior month. We don't come away from the durable goods report with the same feelings as in the rallying bond market. There are clues of manufacturing-led recession but these remain isolated to a limited number of industries. Friday's ISM number for November will give new insights on the extent of any factory slowdown.
No comments:
Post a Comment