Figures were unwrapped south of the border indicating the U.S. economy may have turned a corner.
New orders for durable goods jumped 9.9% in September; however, this still only partially retraced the outsized 13.1% decline in August. Largely in line with the earlier reported increase in aircraft orders from Boeing to 143 in September from just one in August, aircraft orders overall jumped $15.3 billion U.S. (305.5%) after dropping $18.7 billion U.S. (78.8%) the previous month.
This pushed the transportation component up 31.7% in September despite a 0.4% dip in vehicle orders. Excluding the transportation component, orders rose 2.0% to almost fully retrace a 2.1% drop (was -1.6%) in August; however, orders of non-defense capital goods excluding aircraft, a commonly used leading indicator of future business capital investment, was unchanged in September following a downwardly revised 0.2% gain (was 1.1%) in August. A 5.6% decline in July, however, still left the measure down a sizable 6.5% (not annualized) in Q3 as a whole.
Shipments of durable goods rose 0.8% in September; however, this only partially retraced a sizable 2.9% drop in August. As well, shipments of non-defense capital goods excluding aircraft, which enters directly into the Bureau of Economic Analysis’ quarterly estimate of business capital spending, fell for a third consecutive month, slipping 0.3% in September following 1.2% and 1.6% declines in August and July, respectively. This left the measure down an annualized 4.9% in Q3 as a whole which marks the first quarterly decline since Q3 2009.
In a separate report released this morning, initial jobless claims fell 23,000 to 369,000 in the week ending October 20 after jumping 50,000 to 392,000 (previously was 388,000) the previous week from an over four-year low of 342,000 the first week in October. Claims were unusually volatile over the first two weeks of October, reportedly a result of difficulties seasonally adjusting the data in the first week of the calendar quarter. The reading of 369,000 in the latest week is just slightly above the average 367,000 reading over the previous two weeks and likely provides a truer indication of the underlying pace of layoffs.
