US Durable Goods Orders: Blame transportation for the 0.4% decline – Wells Fargo
|Data released on Wednesday showed a lower-than-expected slide in Durable Goods Orders in September. Analysts at Wells Fargo point out weakness in transportation orders was largely behind the 0.4% decline in the main index. They point out numbers continue to demonstrate a manufacturing sector strapped by a lack of supply.
Key Quotes:
“Durable goods orders slipped 0.4% in September, but declines can largely be traced to the volatile transportation sector. Excluding transportation, orders advanced for the seventh consecutive month, rising 0.4%. While the trend in core orders has been rather resilient, the data for September continue to demonstrate a manufacturing sector strapped by a lack of supply.”
“The weakness in transportation orders was largely expected. The 27.9% decline in aircraft orders is consistent with orders data from Boeing, which revealed just 27 new orders during the month, around half of what is traditionally seen during September, and down from 53 new orders in August.”
“Outside transportation, the orders details were pretty mixed. Orders for machinery and metals increased, but computers and electrical equipment orders decreased. Overall, the continued gain in core capital goods orders in September is encouraging and points to ongoing strength in capital investment.”
“This morning's data present some upside risk to our call for equipment spending to decline by 7.6% in Q3.”
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