Demand for US durable goods fell 2.0 per cent in October, with new orders decreasing $4.6bn (£2.8bn). Analysts has expected a 1.9 per cent drop, and the slide followed September's 3.8 per cent rise (revised from 3.7 per cent). Excluding transport, the drop was just 0.1 per cent.
The decline was led by a slowdown in civilian aircraft orders, which decreased $3bn - a 15.9 per cent drop, and to seasonal adjustments - something that typically effects the first month of a quarter.
However, as Paul Ashworth of Capital Economics points out, Boeing has already said that it secured orders worth around $100bn at this month's Dubai air show. "That should translate into a jaw dropping 700 per cent month-on-month surge in aircraft orders and a 40 per cent month-on-month jump in overall orders", says Ashworth.
Shipments of manufactured durable goods were up for the third month in a row in October, increasing $0.5bn - or two per cent - to $233.2bn. This is the highest level since equivalent records began in 1992.
Inventories of durable goods increased $1.2bn - or three per cent - up six of the past seven months.
Proxies for cap ex & growth indicate manufacturing has slowed ex-aircraft in Q4'13 reflects difficult growth prospects in current quarter.— Joseph Brusuelas (@joebrusuelas) November 27, 2013
Ashworth: "The survey evidence on capex intentions has been pointing to a rebound in equipment investment for some time now, but it just isn't coming through in the actual hard data."