US durable goods orders up just a fraction in August

US durable goods orders are up just 0.1 per cent in August. After a 7.3 per cent drop last month, analysts had been expecting no change this month.

Worse news when transportion is excluded. Orders fell by 0.1 per cent, from a 0.6 per cent fall in the last period. Economists were forecasting a slight increase of one per cent.

Paul Ashworth, chief US economist, Capital Economics:

Boeing already reported that it took orders for only 16 planes in August, down from 90 in July. Yet the official orders figures show a trivial 1.2%m/m decline. Aside from transportation, core durable goods orders actually fell by 0.1% m/m last month, with weakness in computers/electronics and primary metals.

Nevertheless, the key measure of non-defence capital goods orders (ex. aircraft) rebounded by 1.5% m/m, partially reversing a 3.3% decline in July. Similarly, actual shipments of non-defence capital goods orders (ex. aircraft) increased by 1.3% m/m last month.

With the survey evidence on capex intentions improving markedly over the past few months, we would expect to see capital goods orders and shipments increasing more rapidly soon. Third-quarter growth in equipment investment will be pretty weak, but the fourth quarter should be notably better.