· Orders
for durable manufactured goods fell for the third consecutive month.
The 0.4% slip in October followed a 1.4% slide in September that was
only slightly revised. The latest slip contrasted with Consensus
expectations for a 0.2% uptick.
· Excluding the
notably volatile transportation sector, orders fell an unexpected 0.7%
although the September figure was revised to a 1.1% gain from the
slight 0.3% increase reported initially.
· In the transportation sector, orders for aircraft & parts
fell 6.3% (+9.9% y/y) owing to a 5.2% (+10.6% y/y) decline in
nondefense orders. Orders for motor vehicles & parts also fell a
hefty 1.4% (-3.7 y/y), down big for the third consecutive month.
· Orders for nondefense capital goods slid 3.1% helped lower by
the drop in aircraft. Less aircraft, however, orders were also weak
and posted a 2.3% decline. Three month growth in these orders fell to
-1.0%, the weakest since early this year.
· Fewer orders for
communications equipment led the decline with a 22.6% (+3.3% y/y)
plunge. Machinery orders also fell 1.7% and three month growth
in these orders fell to -1.7%.
· Also down were orders for computers & related products
which fell 15.2% (+11.9% y/y) after strong gains during the prior two
months.
· To the upside,
primary metal orders rose 3.0% (5.0% y/y) but over the last three
months the gain is a weaker 0.5%. Orders for electrical
equipment, appliances and components recovered all of the prior
month's decline with a 4.1% (1.8% y/y) gain.
· Overall shipments of durable goods rose 0.6% (1.4% y/y) after large
declines during the prior two months. Less transportation shipments
rose 0.6% (1.6% y/y) after two months of declines by a like amount.
· Inventories of
durable goods rose 0.2% (2.1% y/y) and less transportation rose 0.2%
as well (1.2% y/y).
· Unfilled orders were firm again last month and rose 1.0%
(17.9% y/y). Much of that strength has been due, however, to the
strength in orders for aircraft. Less the transportation sector
altogether unfilled orders rose 0.7% in October and the y/y gain is a
lesser 9.3%.
· Financial Markets and Central Banking, today's speech by Federal Reserve Board Vice Chairman Donald L. Kohn at the Council on Foreign Relations, New York, New York, is available here.
· Minutes of Board discount rate meetings, October 1 through October 31, 2007 from the Federal Reserve Board can be found here.