Home   Logon   Mobile Site   Research and Commentary   About Us   Call 1.800.621.1675 or Email Us       Follow Us: 

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Click for Bio
Follow Brian on Twitter Follow Brian on LinkedIn View Videos on YouTube
   Bob Stein
Deputy Chief Economist
Click for Bio
Follow Bob on Twitter Follow Bob on LinkedIn View Videos on YouTube
 
  New Orders for Durable Goods Rose 0.6% in October
Posted Under: Data Watch • Durable Goods

 

Implications:  Holiday cheer arrived early with this morning's report on durable goods, which easily beat consensus expectations and showed some green shoots for business investment.  And even though the biggest individual contributions to today's gain came from the volatile aircraft sector, orders excluding transportation equipment matched the headline gain of 0.6%.  Outside of aircraft the biggest gains in October came from fabricated metal products and industrial machinery.  More broadly, it looks like durable goods orders may be turning a corner after persistent weakness earlier this year.   Over the past five months, new orders for durable goods have risen at an 8.0% annualized rate, a stark reversal from the annualized decline of 12.6% during the first five months of 2019.  Arguably the best news in today's report came from "core" non-defense capital goods ex-aircraft, where both new orders and shipments posted their best gains since January.  For shipments (a key input for business investment in the calculation of GDP growth) this was the first increase in five months.  Even if this measure remains unchanged in November and December, shipments will be up at a 0.9% annualized rate in Q4 versus the Q3 average.  We expect the rate of GDP growth to move higher in the fourth quarter, especially if the weight on growth from weak business investment spending continues to abate. A Phase 1 trade deal with China looks more and more likely as election season approaches and would help reduce some of the uncertainty surrounding investment decisions going forward.  In employment news this morning, initial jobless claims fell 15,000 last week to 213,000, while continuing claims declined 57,000 to 1.640 million. Plugging this data into our models suggests nonfarm payrolls picked up substantially in November.

Click here for PDF version

Posted on Wednesday, November 27, 2019 @ 11:57 AM • Post Link Share: 
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.
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 © 2020 All rights reserved.