According to the Commerce Department, durable goods orders rose 0.1% in August. Core shipments (goods not including aircraft) showed a 1.3% uptick in August. It snapped a two month decline.
This is good news for economic growth since these ‘core’ shipments and goods go directly into government estimates for GDP. The 1.3% jump in August suggests government spending cutbacks are having less of an effect on the economy.
New orders for core goods rose 1.5% in August. It didn’t match economists’ expectations, but did reverse July’s 3.3% drop. New orders are viewed by investors and economists as a gauge for business spending plans.
The 0.1% rise in overall durable goods orders beat expectations of a drop of 1.5%. Strong demand in the auto industry helped orders. Take out the transportation sector and orders fell 0.1%.
The Commerce Department did revise July’s data to show an even steeper drop. Initial readings for durable goods orders showed a 7.4% decline. That was revised to an 8.1% decline.
Stock futures are muted after this morning’s data. The major stock indexes are showing a flat opening with the Dow down 4 points, the S&P 500 down 1 point and the Nasdaq flat.
Investors will be watching the DC fight over the federal budget and debt ceiling in the days and weeks ahead.