Implications:  New orders for durable goods rose 2.9% in August, but the details are a bit softer than the headline number would suggest.  The rise in new orders was largely due to the very volatile categories of commercial and defense aircraft, where August orders rose 21.6% and 50.1%, respectively.  These wild swings are why ex-transportation orders provide a much better read on the health of activity and those were more mixed in August.  The 0.4% rise in non-transportation orders was led by machinery (+1.3%), fabricated metal products (+0.7%), and primary metals (+0.1%), while electrical equipment (-0.2%) and computers & electronic products (-0.1%) declined.  The most important number in today’s release, core shipments – a key input for business investment in the calculation of GDP – fell 0.3% in August after a robust 0.6% increase in July.  If unchanged in September, these orders would be up at a 3.1% annualized rate in Q3 versus the Q2 average.  While employment and inflation remain under the spotlight as the Federal Reserve looks very likely to continue the rate cut process at the next meeting in October, we will also be paying close attention to how businesses – and consumers – are responding to the certainty now in place from the passage of the tax bill, which should enhance the competitiveness of US companies.  In other news this morning, initial jobless claims fell 14,000 to 218,000 while continuing claims slipped 2,000 to 1.926 million. Pairing these figures with other recent data on employment suggests modest continued job growth in September.

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