October Durable Goods Surprise to the Upside

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The Commerce Department has reported that durable goods were effectively unchanged in the month of October at a seasonally adjusted $216.95 billion. Dow Jones had a consensus expectation of -1.2% and Bloomberg had an estimate of -0.8%. On an ex-Transportation basis, this was up by 1.5%, above the Bloomberg consensus of -0.4%.

It is interesting that the Commerce Department showed that increased demand for machinery offset a decline in auto demand and airplanes. We were expecting this number also to have been hampered a bit by the hurricane. Orders for nondefense capital goods orders outside of aircraft rose by 1.7%, and that was said to be a high since before summer. Motor vehicle demand was down by 1.6% in October. Civilian aircraft is highly volatile, but that fell by some 5.8%. Defense orders were lower by 7.1%, but that followed huge gains before as orders were coming in ahead of the expected defense spending cuts.

Futures remain in negative territory this morning: Dow futures are down 5 points and S&P 500 futures are down by 0.2 points.

JON C. OGG

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