• The factory sector continues to strengthen.

• Business investment leads the improvement.

• Shipments rise modestly; orders backlogs ease.

Manufacturers' orders for durable goods strengthened 1.9% (-1.9% y/y) during September following an unrevised 0.4% August gain. A 0.3% gain had been expected in the Action Economics Forecast Survey. New orders have risen 41.5% since the recession low in April.

Business investment also has firmed. Nondefense capital goods orders excluding aircraft rose 1.0% (4.5% y/y), the fifth consecutive month of strong increase. Orders have risen 12.1% during the last five months.

Orders for transportation equipment rose 4.1% (-8.7% y/y) led by a surge in aircraft & parts bookings. Motor vehicles & parts orders gained 1.5% (5.2% y/y). Primary metals orders strengthened 4.0% (-1.6% y/y) while fabricated metals orders rose 1.2% (-1.8% y/y). Computer electronic product orders improved 0.6% (5.7% y/y). Offsetting these gains, orders for electrical equipment & appliances declined 2.0% (-4.1% y/y) and machinery orders slipped 0.3% (-2.5% y/y).

Shipments of core capital goods rose 0.3% (2.5% y/y) to the highest level since November 2013. Total shipments edged 0.3% higher (-0.6% y/y). Shipments of transportation products improved 0.5% (-2.4% y/y). Shipments excluding transportation rose 0.2% (0.3% y/y). Machinery shipments fell 1.1% (-3.6% y/y) while electrical equipment & appliance shipments fell 1.2% (-4.9% y/y).

Unfilled orders for durable goods slipped 0.2% (-6.3% y/y). Excluding transportation, they rose 0.7% (0.9% y/y).

Inventories of durable goods rebounded 0.4% (0.7% y/y) following three straight months of decline. Excluding transportation, inventories rose 0.2% (-3.0% y/y) after falling for five consecutive months.

The durable goods figures are available in Haver's USECON database. The Action Economics consensus forecast figure is in the AS1REPNA database.