Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Bio
X •  LinkedIn
   Bob Stein
Deputy Chief Economist
Bio
X •  LinkedIn
 
  New Orders for Durable Goods Increased 0.4% in August
Posted Under: Data Watch • Durable Goods
Supporting Image for Blog Post

 

Implications:  New orders for durable goods continued to climb higher in August, though at a slower pace than the consensus expected as the growth of orders cooled from the fastest 3-month pace in series history dating back to the early 1990's.  With a combined 39.0% increase since the April bottom, new orders now sit just 5.4% below the February pre-pandemic high, signaling a sharp recovery in the manufacturing sector.  The volatile transportation sector lived up to its name once again, with a sizeable rise in orders for commercial aircraft being largely offset by a drop in orders for motor vehicles.  Excluding transportation, orders rose 0.4% in August and have now broken above the levels seen to start the year.  Among the core non-transportation categories, orders activity was mixed in August, with machinery (+1.5%), computers & electronic products (+1.2%), and primary metals (+1.2%) rising while electrical equipment (-1.5%) and fabricated metal products (-1.3%) declined.  One of the most important pieces of data from today's report, shipments of "core" non-defense capital goods ex-aircraft (a key input for business investment in the calculation of GDP growth), rose 1.5% in August.  Even if these orders remain unchanged in September, this measure will be up at a 30.8% annualized rate in Q3 versus the Q2 average, suggesting that business investment, which was a major drag on real GDP in the second quarter, will be a major tailwind in Q3.  While this represents growth from a very low base, Q3 is on track to see real GDP growth in the 25 - 30% range.  The Atlanta Fed's "GDP Now" model had Q3 growth at a 32.0% annual rate going into today's report, but we are sticking with a slightly more conservative forecast as inventories may remain a source of weakness.  We also expect the economy will continue to grow at an above-trend pace in Q4 and through 2021, but the road to recovery will be a long slog back.  What matters most, is that we have started our way down the path.

Click here  for PDF version

Posted on Friday, September 25, 2020 @ 10:04 AM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
Search Posts
 PREVIOUS POSTS
COVID-19 Tracker 9/24/2020
Coronavirus High Frequency Data 9/24/20
New Single-Family Home Sales Increased 4.8% in August
Coronavirus High Frequency Data 9/22/20
Existing Home Sales Increased 2.4% in August
The Long Slog Recovery!
M2 and C&I Loan Growth
COVID-19 Tracker 9/17/2020
Coronavirus and Economic Update 9/16/20
Coronavirus High Frequency Data 9/17/20
Archive
Skip Navigation Links.
Expand 20242024
Expand 20232023
Expand 20222022
Expand 20212021
Expand 20202020
Expand 20192019
Expand 20182018
Expand 20172017
Expand 20162016
Expand 20152015
Expand 20142014
Expand 20132013
Expand 20122012
Expand 20112011
Expand 20102010

Search by Topic
Skip Navigation Links.

 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
Follow First Trust:  
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2024 All rights reserved.