US Capital Goods Orders Dropped In Back To Back Months

EDITOR'S NOTE: In a troubling sign for the economy, Durable Goods Orders unexpectedly dropped month-over-month in September by 0.3%. Economic analysts — who seem to be increasingly missing the mark with their projections — said not to worry, the numbers would rebound in October, per Zero Hedge. “They were wrong. Orders tumbled 0.5% MoM (vs +0.2% MoM expected) in October and September's 0.3% MoM print was revised down to -0.4% MoM.” This hasn’t happened since the pandemic depths of April 2020. Capital goods, which signal business investment ticked up slightly, but that wasn’t enough to offset the larger issues. 

After disappointingly dropping 0.3% MoM in September, analysts expected Durable Goods Orders to rebound in preliminary October data. They were wrong.

Orders tumbled 0.5% MoM (vs +0.2% MoM expected) in October and September's 0.3% MoM print was revised down to -0.4% MoM...

Source: Zero Hedge via Bloomberg

This is the first back-to-back drop in orders since April 2020.

Total durables orders were held down by a 14.5% drop in bookings for commercial aircraft, which were offset by a surge in motor vehicle new orders +4.8% and communication equipment +7.9%

Photo: Zero Hedge

Finally, on the bright side, the value of core capital goods orders, a proxy for business investment in equipment that excludes aircraft and military hardware, rose 0.6% after a upwardly revised 1.3% increase a month earlier.

Core capital goods shipments, a figure that is used to help calculate equipment investment in the government’s gross domestic product report, rose 0.3% after jumping an upwardly 1.3% in the prior month.

Additionally, Defense capital goods new orders -20.1% - the biggest MoM drop since April 2021.

Photo: Zero Hedge

We're gonna need more war!

Originally posted on Zero Hedge.