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 Declined 0.8% in September
Posted Under: Data Watch • Durable Goods • GDP
Supporting Image for Blog Post

 

Implications:  New orders for durable goods declined 0.8% in September – the third drop in four months – as transportation led orders lower, while prior months data were revised down as well.  Transportation orders can swing wildly from month to month as big aircraft orders tend to come in chunks rather than steadily over time.  That was the case once again in September, as commercial aircraft orders fell 15.1% and defense aircraft orders declined 2.5%.  Excluding the transportation sector, orders for durable goods rose 0.4% versus a consensus expected decline of 0.1%.  Fabricated metal products led non-transportation orders higher, rising 2.1% in September, and, along while primary metals (+0.5%), more than offset declines in orders for computers and electronic products (-0.3%) and machinery (-0.2%).  The most important number in the release, core shipments – a key input for business investment in the calculation of GDP – fell 0.3% in September following a 0.1% decline in August and a 0.4% drop in July. As a result, these shipments declined at a 2.8% annualized rate in Q3 versus the Q2 average.  This represents the largest quarterly decline since the second quarter of 2020, and the third quarter in the last four where core shipments were down, a clear sign that all is not well on the economic front. Meanwhile, overall orders for durable goods – both including and excluding transportation – are failing to keep pace with inflation.  Add in potential volatility in the data due to labor strikes, hurricane impacts, and businesses potentially pausing investment decisions as they await the results of the elections and the resulting policy changes that could follow, and the Fed’s already hazy view into the future gets even harder to parse. While GDP readings continue to run positive (click here for our breakdown of what to expect from next week’s first look at Q3 GDP), we expect a rocky path forward as the economy feels the lagged effects of the Federal Reserve’s tightening of monetary policy.

Click here for a PDF version

Posted on Friday, October 25, 2024 @ 10:41 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.