Durable Goods Orders Fall After Large Increase the Prior Month

- Durable Goods Orders for August fell 4.9% versus estimates of a 4.0% decline and an upwardly revised 6.1% gain the prior month.

- Durables Ex Transports for August fell 1.8% versus estimates of a 1.0% decline and a downwardly revised 3.4% gain in July.

BOTTOM LINE: Orders for US-made durable goods fell in August after July’s large increase that was the most in almost a year, Bloomberg reported. Demand for autos dropped 6.2% versus an 11% surge in July. In July, auto dealers may have been trying to boost supplies ahead of a possible strike at General Motors(GM). Non-defense capital goods orders ex aircraft, a gauge of future business investment, fell .7% versus a .9% gain in July. However, shipments of those items rose .8% after no change in July. Unfilled orders for capital equipment rose 1.2%, which suggests manufacturers had enough demand to keep manufacturing lines busy over the coming months. Inventories of durable goods fell .1%, the first decline since February 2006. I expect volatile durable goods orders to bounce back next month. I still think manufacturing will help add to overall US growth over the intermediate-term as companies gain confidence in the sustainability of the current expansion and rebuild depleted inventories.