Implications:  New orders for durable goods easily beat expectations in September, and closed out a third quarter that goes into the history books as the fastest quarter (by far) for new orders growth.  With a combined 41.5% increase since the April bottom, new orders now sit just 3.7% below the February pre-pandemic high, signaling a sharp (and very V-shaped) recovery in the manufacturing sector.  The volatile transportation sector once again lived up to its name, with a sizeable rise in orders for commercial aircraft and motor vehicles partially offset by a drop in orders for defense aircraft.  Excluding transportation, orders rose 0.8% in September and now stand 1.5% above levels seen at the start the year.  Among the core non-transportation categories, orders activity was mixed in September, with primary metals (+4.0%), fabricated metal products (+1.2%), and computers & electronic products (+0.6%) rising while electrical equipment (-2.0%) and machinery (-0.3%) 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 0.3% in September.  In the third quarter, this measure rose at a record shattering 32.1% annualized rate versus the Q2 average.  In other words, business investment, which was a major drag on real GDP in the second quarter, was a major tailwind in Q3.  While this represents growth from a very low base, third quarter GDP – due out this Thursday – looks to have grown at a 33.4% annualized rate.  From historically bad, to historically good, this year has been a wild ride for economic growth.  And while we are still in the early stages of the fourth quarter, it looks poised for continued growth . In other economic news this morning, the FHFA index, which measures prices for homes financed by conforming mortgages, rose 1.5% in August and is up 8.0% from a year ago, a major acceleration from the gain of 4.8% in the twelve months ending in August 2019.  On the manufacturing front, the Richmond Fed Index surged to +29 in October from +21 in September.  This is the highest reading for the index since the series began back in late 1993 and continues to show a healthy rebound in manufacturing activity versus the deeply negative readings early on in the pandemic.

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