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Analysts at Nomura point out that the US durable goods orders excluding volatile transportation components increased 0.1% m-om in August, below expectations (Nomura: 0.6%, Consensus: 0.4%), indicating somewhat weaker momentum in the industrial sector moving through Q3.

Key Quotes

“Total durable goods orders rose 4.5% m-o-m, driven by a sharp 69.1% m-o-m jump in orders for nondefense aircraft, a typically volatile series. Orders for vehicles and parts declined 1.0% m-o-m in August.”

“Orders for core capital goods (nondefense capital goods excluding aircraft) fell 0.5% mo-m after a strong gains over the past four months.”

Advance goods trade deficit widens as good exports slow further

The advance goods trade balance registered a $75.8bn deficit in August, wider than expectations (Nomura: $69.0bn, Consensus: $70.6bn). Goods exports fell 1.6% m-o-m in August with broad-based declines and have been slowing since May after a transitory jump in export orders for agricultural goods and other US products ahead of imposition of retaliatory tariffs from US trading partners.”

Q2 GDP, third estimate, shows upward revision to core PCE inflation

The third estimate of Q2 real GDP growth registered 4.2% q-o-q saar with few surprises in the subcomponents. Real GDI growth was revised down 0.2pp to 1.6%, lowering the average of real GDP and GDI growth to 2.9%, consistent with our current assessment of underlying economic momentum around 3%.

Core PCE price inflation was revised up to an annual rate of 2.11% q-o-q in Q2 from 2.01% previously, largely due to higher nursing home service prices likely based on BLS’ revised producer price index data.”