The Census Bureau reported that growth in new durable goods orders jumped 2.2 percent in September, extending the 2.0 percent gain in August. The data have been highly volatile over the past three months, mostly on large swings in nondefense aircraft and parts orders, which rose 31.5 percent in September. Excluding transportation equipment, new durable goods orders increased 0.7 percent in this report, the same pace as in August. New durable goods orders have trended generally in the right direction across the past 12 months. New durable goods orders have increased by a very healthy 8.3 percent since September 2016, or excluding transportation equipment, the year-over-year gain was 7.5 percent.
Looking more closely at the various durable goods sectors in September, the data were mixed but higher on net. Sales increased for fabricated metal products (up 1.7 percent), computers and electronic products (up 1.6 percent), other durable goods (up 0.7 percent) and motor vehicles and parts (up 0.1 percent). In contrast, orders declined for machinery (down 0.2 percent), electrical equipment, appliances and components (down 0.1 percent) and primary metals (down 0.1 percent). The bottom line is that new orders for core capital goods (or nondefense capital goods excluding aircraft) increased 1.3 percent in September. This figure is often seen as a proxy for capital spending in the U.S. economy. On a year-over-year basis, core capital goods have risen 7.8 percent, up from $61.2 billion in September 2016 to $65.9 billion in this release.
Meanwhile, durable goods shipments rose 1.0 percent in September. Much like the new orders data described above, the long-term picture continues to be quite favorable. Since September 2016, durable goods shipments have risen at decent rates, up 5.0 percent, with year-over-year growth of 6.7 percent when excluding transportation equipment shipments. In addition, shipments of core capital goods have also improved mightily over the past 12 months, up 7.0 percent year-over-year.