After disappointingly dropping 0.3% MoM in September, analysts expected Durable Goods Orders to rebound in preliminary October data. They were wrong.
Orders tumbled 0.5% MoM (vs +0.2% MoM expected) in October and September’s 0.3% MoM print was revised down to -0.4% MoM…
This is the first back-to-back drop in orders since April 2020.
Total durables orders were held down by a 14.5% drop in bookings for commercial aircraft, which were offset by a surge in motor vehicle new orders +4.8% and communication equipment +7.9%
Finally, on the bright side, the value of core capital goods orders, a proxy for business investment in equipment that excludes aircraft and military hardware, rose 0.6% after a upwardly revised 1.3% increase a month earlier.
Core capital goods shipments, a figure that is used to help calculate equipment investment in the government’s gross domestic product report, rose 0.3% after jumping an upwardly 1.3% in the prior month.
Additionally, Defense capital goods new orders -20.1% – the biggest MoM drop since April 2021.
We’re gonna need more war!