US durable goods orders climbed 3.7 per cent in September, exceeding expectations of a 2.0 per cent rise and following August's marginal 0.1 per cent rise.
Excluding transportation, though, orders saw a 0.1 per cent fall, missing expectations of a 0.5 per cent rise. Paul Ashworth, chief US economist at Capital Economics points out that the results are worse than the headline suggests as the jump was due almost entirely to a bounce back in the voltaile aircraft category, and he says "it appears that third-quarter business investment in equipment stagnated, or even contracted slightly."
A 57.5 per cent rebound in aircraft bookings, along with transportation equipment, which has been up five of the last six months, drove the 3.7 per cent increase in new orders, rising to $77.0bn (£47.53bn) - up 12.3 per cent. This was led by nondefence aircraft and parts, which increased $.69bn. Excluding defence, new orders increased 3.2 per cent.
Boeing took orders for 127 new planes in September, up from an unusually low 16 in August.
Non-defence capital goods orders (excluding aircraft) fell by 1.1 per cent month-on-month and the three-month-on-three-month annualised growth rate plummeted to -8.4 per cent. This suggests, says Ashworth, that fourth-quarter investment in equipment could be weak.
Actual shipments of non-defence capital goods (excluding aircraft) also fell by 0.2 per cent in September, with the three-month-on-three-month annualised growth rate coming in at -2.9 per cent. "That strongly suggests third-quarter growth in business investment in equipment will also be negative or, at best, close to zero", warns Ashworth.
Capital Economics is, accordingly, lowering its third-quarter GDP growth estimate to 1.8 per cent annualised, from 2.0 per cent.