Durable Goods: When doing nothing is really something
|Summary
Despite an upwardly revised surge in July durable goods orders, the payback decline that had been feared did not materialize in August with durable goods orders technically positive, but essentially flat. Excluding transport categories, durables orders had their best month of the year.
Stout gain for durables in August after excluding transports
In a cycle defined by diminished durable goods spending, and at a moment when falling interest rates are set to (at last) be supportive of future spending by lowering financing costs, the August durable goods report is largely better than expected. Setting aside the volatile transportation categories, durable goods orders rose 0.5%, enough to call August the biggest monthly gain of the year in terms of ex-transportation orders (chart).
Durable goods orders edged slightly higher August, a development that was something of a surprise after a major surge in July had most forecasters braced for give-back. Remarkably, the scant gain in August came despite a slight upward revision that lifted the July orders increase to 9.9%. An expected drop in civilian aircraft orders of 7.5% was slightly offset by an 8.0% pick-up in defense-related aircraft spending (chart). The non-defense aircraft category is much larger than defense spending.
Orders for motor vehicles and parts increased a bit in August, though the 0.2% gain here is not nearly enough to offset back-to-back monthly decline in the prior months.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.