Implications:  New orders for durable goods surged in September, rising 1.8%, the second fastest monthly gain this year.  While the headline was boosted by a large increase in commercial aircraft orders, underlying activity remains robust due to a resurgence in capital investment.  Aircraft are often ordered in bulk, which is why orders excluding transportation provide a much better check on the broader economy. These orders continue to rise, up 0.5% in September, though growth has slowed slightly from earlier this year when monthly gains were consistently above 1.0%. That said, these orders are still up 11.1% in the past year.  The increase in September was led by industrial machinery (+1.2%), computers & electronic products (+0.8%), and primary metals (+0.5%).  Electrical equipment was the only major category to decline in September but is still up 4.8% in the past year.  All other categories have experienced a surge in growth in the past year – primary metals, industrial machinery, and computers & electronic products have each experienced double-digit growth in the last twelve months. The most important number in today’s release is core shipments – a key input for business investment in the calculation of GDP – which surged 1.2% in September, marking the eighth consecutive month of growth.  Core shipments were up at a 16.5% annualized rate in Q3 versus the Q2 average, an acceleration from the 11.6% pace in Q2.  These shipments are up 11.5% over the past year, the largest annual gain outside the COVID years since 2012, as capital spending from the hyperscalers, the reshoring of production, and a more favorable tax environment for investment have helped drive a strong increase.  In other manufacturing news, the Kansas City Fed Manufacturing Index, a measure of factory sentiment in that region, declined to +11 in October from +14 in September.  The Richmond Fed index, a measure of mid-Atlantic factory activity, remained at -2 in October.  On the employment front, initial claims fell 6,000 two weeks ago to 194,000 while continuing claims rose 25,000 to 1.728 million. These figures suggest continued job growth in October.

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