Durable goods orders came in well ahead of expectations for August, data out Monday showed.
The 1.8% headline print easily exceeded consensus, which was looking for a 0.7% gain. The range, from 59 economists, was -3.5% to 2%.
Notably, July was revised sharply higher, to a 0.5% gain from a small decline (figure below).
With the previous month’s revision, August’s gain marked the 15th increase in 16 months.
You can thank planes. Commercial aircraft bookings rose almost 80%.
Non-defense capital goods orders ex-aircraft rose 0.5% last month, after a 0.3% increase in July (figure below). That was slightly better than expected.
Core shipments rose 0.7%, which bodes well for growth.
There were signs of the pervasive bottlenecks which continue to frustrate forecasters, including those at the Fed. For example, unfilled orders rose a seventh month.
Although the data will perhaps support current-quarter growth forecasts, surveys suggest the economy is decelerating amid capacity constraints, labor shortages and various disruptions, as businesses struggle to adjust to a post-COVID world.
Flash reads on IHS Markit’s manufacturing and services sector PMIs for September both fell short of estimates and tipped the slowest pace of expansion in a year. Backlogs remained elevated even as factory activity slowed, underscoring the impact of hobbled supply chains.
And so on, and so forth. I won’t pretend this is anything other than an obligatory assessment of incremental data — notable, but the furthest thing from colorful.
At this point, nearly all of the data can be described as “mixed.” Still, six consecutive months of rising orders for business equipment suggests that while the world’s largest economy may have lost some momentum — that the stimulus-inspired joie de vivre has abated — slowdown need not be synonymous with downturn.
