·
Orders for nondefense aircraft soared 50.4% m/m (100.6% y/y) in October.
That combined with a more than doubling (111.1% y/y) of defense aircraft
bookings, caused total durable goods orders to jump 3.4% last month and
therefore recovered all of the little revised 2.0% decline in September.
Consensus expectations had been for a 1.5% rise in October orders.
· Less the volatile transportation sector altogether, durable goods orders rose 0.3% after a 0.2% slip in September which was shallower than the decline initially reported.
· Orders for nondefense capital goods recovered about two thirds of the prior month's drop with a 6.7% spike. Less aircraft these orders rose 1.3% following a 1.7% September decline that was deeper than initially estimated.
· Falling orders for computers &
electronic products have been a drag on the capital goods total of late.
They fell 1.3% (+5.7% y/y) in October for the third hard decline in the
last four months. Computer orders fell 1.7% m/m though the y/y gain of
11.0% was respectable due to a sharp 13.5% jump back in August. Orders
for electrical equipment orders also have been erratic, but the trend is
up. Despite a 3.5% decline in October (+12.3% y/y) the three month
average level rose to its highest since early 2001. Machinery orders, in
contrast, have been consistently strong. A 2.1% (8.5% y/y) rise in
October pulled the three month average of machinery orders to a record
high.
· Shipments of durable goods rose 1.4% (6.9% y/y) in October due to broad based industry gains. Less the transportation sector, shipments rose 1.2% (7.5% y/y) with the standout being a 10.0% y/y gain in electrical equipment.
· Order backlogs rose a strong 1.5% (12.0% y/y) driven partially by a 2.0% (14.4% y/y) rise in transportation. Less transportation backlogs still were firm for the third straight month, though the ratio of backlogs to shipments did slip slightly from its recent high.
· Durable inventories increased 0.4% (4.6% y/y) following an upwardly revised 0.1% Rise in September. The I/S ratio for durable goods fell to its lowest since April of last year.