August equipment orders rose 1.6% as durable goods stayed flat
On Friday, September 25, the Census Bureau said orders for business equipment rose **1.6%** in August, against a 0.5% gain economists polled by Reuters had expected. Total durable-goods orders were virtually unchanged, at $338.6 billion.
Those orders leave out military goods and aircraft. July's increase was revised up to 0.6%, from a first reading of no change. Transportation equipment orders fell 0.6% in August, which Census said is why the overall total did not rise. Orders outside transportation rose 0.3%.
Shipments of the same equipment goods rose 0.6% in August, after 1.4% in July. Those shipments, not the orders, go into the official estimate of business spending on equipment.
Shipments of durable goods, from factory machines to trucks and jets, fell 0.2%, the first drop after eight monthly gains. Transportation shipments drove that drop. In the same month, manufacturing output fell 0.3%, the Federal Reserve said.
The rate backdrop was already set before the numbers came out. The 10-year Treasury yield ended Thursday at 5.18%. Last week the Federal Reserve raised its target range for short-term rates to 3.75% to 4%. Before the release, CNBC reported that traders were pricing a nearly 71% chance of another increase in October, using the CME FedWatch tool, built from interest-rate futures.
Frequently asked
Why did durable-goods orders stay flat?
Transportation equipment orders fell 0.6%, which Census said is why the overall total did not rise.
What do these equipment orders leave out?
They leave out military goods and aircraft.
Do the orders go into the official estimate of business spending on equipment?
No: shipments of the same equipment goods, not the orders, go into that estimate.
What happened to durable-goods shipments in August?
They fell 0.2%, the first drop after eight monthly gains, and transportation shipments drove that drop.