Data released today showed that durable goods orders dropped 0.4% in October and the report contained negative revisions to September’s data. Analysts at Wells Fargo point out that core capital goods orders also disappointed, and the three-month average annualized growth rate is now the lowest since March.
Key Quotes:
“Durable goods orders fell 4.4% in October, the largest drop since July 2017. The volatile defense and nondefense aircraft sectors both saw sharp double digit declines, contributing to the headline weakness.”
“Though defense orders were down on the month, the boost to defense spending from the last federal budget deal is evident in the durables data.”
“Shipments of core orders posted a stronger 0.3% gain, but here too downward revisions tempered the pick-up. We expect business equipment spending to bounce back in Q4 after a weak Q3 but for the pace to be below the robust rates seen in H1-2018.”
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