Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Bio
X •  LinkedIn
   Bob Stein
Deputy Chief Economist
Bio
X •  LinkedIn
 
  New Orders for Durable Goods Rose 0.8% in November
Posted Under: Data Watch • Durable Goods
Supporting Image for Blog Post

 

Implications:  New orders for durable goods rebounded in November, as the volatile transportation sector more than offset weaker data elsewhere.  The biggest source of strength in today's report came from aircraft, with defense orders rising 31.5% and civilian orders up 6.7%.  Stripping out the typically volatile transportation sector – which rose 2.9% in November - shows durable goods orders fell a modest 0.3%.  A closer look at the details shows that declines in industrial machinery and electrical equipment swamped increases in primary and fabricated metals.  But more important than month-to-month changes, the trend continues to show a healthy pace of activity, with total orders up 5.3% in the past year and orders excluding transportation up 4.9%.  The most anticipated data point in today's release was shipments of non-defense capital goods ex-aircraft (a key input for business investment in the calculation of GDP growth), which disappointingly fell 0.1% in November.  However, a large upward revision to the October reading actually points to a stronger pace for investment in Q4 as a whole. If these orders were to remain unchanged next month, shipments would be up at a 1.9% annualized rate in Q4 versus the Q3 average.  Further - barring a large decline in December - 2018 looks set to post the fastest full-year growth rate for this series in six years, demonstrating that the promised benefits to business investment from the Tax Cuts and Jobs Act have in fact materialized.  Healthy growth in durable goods orders, a strong labor market, and the economy on track for the fastest annual growth in more than a decade begs the question of why the financial media are still so focused on doom and gloom.  As far as the data show, companies (and consumers) don't seem nearly as worried as the pouting pundits, and political posturing has little chance of denting the strong growth track that entrepreneurs and innovators have set us on.  In other recent news, the Philly Fed Index, a measure of East Coast factory sentiment, fell to +9.4 in December from +12.9 in November.  Despite the decline, the index remains well in positive territory, signaling continued optimism from manufacturers in that region.

Click here for PDF version

Posted on Friday, December 21, 2018 @ 11:36 AM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
Follow First Trust:  
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2024 All rights reserved.