US durable goods orders likely to slump further

Pared by an aircraft-led drop in transportation equipment requisitions, US durable goods orders probably contracted by 2.5% last month, eclipsing the 2.3% falloff posted in August. Reflecting a projected 81.5% dive in commercial-jetliner bookings during the reference period, transportation requisitions likely fell by 10.1%, shaving an estimated $7.9 billion off the headline tally in September. 

Excluding the anticipated transportation-sector weakness, the hard goods orders are expected to rise by 1.2%, the strongest showing in 13 months. Closely followed soundings on nondefense capital goods orders and shipments excluding aircraft likely will reinforce the positive underlying tone of the Census Bureau's advance report. 

"Consistent with recent intra-quarterly patterns, core capital goods bookings probably ended the summer on a high note, rising by 1.4% and erasing August's 0.8% decline. Meanwhile, nondefense capital goods shipments less jetliner deliveries are forecast to have risen by an almost identical 1.5%, the largest gain since August 2014", says Societe Generale. 

These projections  would place core orders and shipments over the July-September span 10.8% and 4.5% annualized above their respective spring-quarter averages, pointing to a pickup in business equipment spending in the Bureau of Economic Analysis' upcoming Q3 GDP report.