Factory Orders Continued to Rise in August
|After posting a sizable 1.4 percent rise in July, factory orders rose 0.2 percent in August. While the headline reading was better than expected, the details continued to signal soft business investment in Q3.
Factory Sector Still Showing Signs of Life
- New factory orders rose 0.2 percent with both durable and nondurable goods orders rising in August. Excluding the volatile transportation goods, orders were flat for the month.
- Orders for core capital goods rose 0.9 percent after a large 0.8 percent jump in July. In addition, core capital expenditure orders are now back in positive territory at 2.3 percent on a three-month annualized basis.
Business Investment Still Looks Soft in Q3
- Core capital goods shipments fell 0.1 percent in August, taking the three-month annualized rate of core shipments to a decline of 4.8 percent. Based on today’s report business investment may be a disappointment again in the third quarter.
- Inventory building, which has subtracted from GDP growth for five consecutive quarters, rose for the second month in a row, rising 0.2 percent in August after a 0.2 percent rise in July.
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