Demand for key capital goods made in America soared in September, with orders and shipments soaring, an indication that the pace of economic growth picked up in the third quarter.
Orders for non-defense capital goods orders excluding aircraft, considered a proxy for business spending, rose 0.9 percent, matching the upwardly revised 0.9 percent increase a month earlier, the Commerce Department said on Wednesday.
Economists had forecast a slowdown from the previously reported 0.4 percent growth in August to a rise of 0.2 percent in September. Shipments of core capital goods also rose 0.9 percent.
The durable goods report was delayed several weeks by the 43-day shutdown of the federal government that began in October.
Orders for raw metals and fabricated metals products rose at a very strong pace, indicating that U.S. metals tariffs have not sapped demand.
Orders for electronics and appliances rose 1.5 percent for the month. Year-to-date, orders are up five percent, which may indicate that tariffs are shifting demand from abroad to domestic manufacturers.
Motor vehicles and parts orders rose 0.4 percent.
Overall durable goods orders rose 0.5 percent, more than economists had forecast.
Orders for defense aircraft rose 30.9 percent. Orders for defense capital goods rose 23 percent.
The strength of durable goods orders suggests that the manufacturing sector in the U.S. is rebounding.
The government said on Tuesday that its report on third-quarter GDP would be released on December 23, nearly a month after the scheduled date. The report was delayed by the government shutdown. The economy grew at a 3.8 percent pace in the second quarter. The Atlanta Fed’s GDPNow tracker suggests the economy is growing at a four percent pace in the third quarter, although the delay of many economic reports due to the shutdown raises questions about the accuracy of the nowcast.
Read the full article here