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First Cut: New durables orders off in September mainly due to transportation, but not entirely

New orders for durable goods were down 1.1% in September from August after a revised up 0.3% in August from July (previously up 0.2%). New orders excluding transportation were down 0.3% in September. Transportation orders fell 2.7% on a 1.6% decline in motor vehicles and parts and 11.8% drop for nondefense aircraft. A modest 6.3% increase in defense aircraft orders provided only a partial offset the other components.

A few mild increases in primary metals (up 0.3%) and machinery (up 0.2%) and a stronger increase for computers (up 1.4%) and electrical equipment (up 0.9%) didn’t wipe out the declines in transportation and fabricated metals (down 1.5%).

“Core” new orders — total durables less civilian aircraft capital goods and defense capital goods — were down 0.2% in September. The core continued to alternate mild decreases with mild increases and suggested the the underlying trend for orders is essentially flat.

Unfilled order were about unchanged in September from August, in part reflecting the ongoing problems at Boeing and cancellations of existing orders. Unfilled nondefense orders were down 0.2%, although a recent spate of military orders added 1.9% to order backlogs of defense aircraft. Motor vehicle unfilled orders were down 1.3%, the severity of which is possibly related to the UAW strike at GM and a lack of business, although backlogs for cars and light trucks have been trending lower.

Shipments were down 0.4% in September, also possibly feeling the impact of the UAW strike with motor vehicle shipments down 1.5%. Inventories were up 0.5% month-over-month as generally slower conditions left some goods in stock.

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