Implications:  A bounce back in airline orders led an otherwise tepid report on durable goods orders in August.  Strip out the typically volatile transportation sector – which rose 13% in August after a 3.7% decline in July - and durable goods rose 0.1%.  A look at the details shows rising orders for primary metals, electrical equipment & appliances, and machinery more than offset a 0.5% decline in orders for computers and electronic products.  But what is most important is that the trend in orders continues to show a healthy pace of activity, with total orders up 11.8% in the past year, and orders excluding transportation up 7.3%.  All this data begs the question, what about those pesky trade concerns the media keeps talking about?  As far as the data show, companies (and consumers) don't seem nearly as worried as the pouting pundits.  We expect this trend to continue as the tax rate cuts, full expensing of equipment for tax purposes, and easing of backorders boost business activity through the remainder of 2018 and into 2019.  Possibly the best news in today's report was a 0.1% increase in shipments of non-defense capital goods excluding aircraft (along with an upward revision to the July data), a key input in the calculation of GDP growth.  If unchanged in September, these shipments will be up at a 7.9% annualized rate in Q3 versus the Q2 average.  Paired with other recent data, it looks like real GDP is growing at a 4.0% annual rate in Q3.  How do you reconcile GDP growth on track for the best year since 2005 – and continued data refusing to show a slowdown – with calls that a recession is looming or fear that the Fed is close to getting tight with the Fed Funds rate now at 2.25%?  We aren't quite sure how the fear-mongers are doing it, either.  The Kevlar economy has the fundamentals behind it, and plenty of room to run.  

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