Durable goods orders

Core durable goods orders in August were better than expected, even with a 5 tenths downward revision to July. An order pick up of 1.1% m/o/m in electrical equipment led this and I’m guessing that the huge increase in the construction of manufacturing plants, related to the government subsidy programs, has a lot to do with this. It’s up 6.2% y/o/y. Orders for computers/electronics rose .3% m/o/m after falling by .6% in July and higher by 1.3% y/o/y. Machinery orders were up by .5% m/o/m but little changed y/o/y, higher by .6%. Orders for metals were mixed.

Orders for vehicles/parts, ahead of the possibility of an auto strike, which obviously is here, were up .3% m/o/m and by 6.3% y/o/y. Dealer inventories have improved dramatically this year and the current stoppage of production, assuming is short lived, would tighten the inventory situation only slightly. Of course, anything that drags on makes this story worse again, raising prices for both new and used cars.