US Factory Orders bodes well for continued strength in business investment - Wells Fargo
Analysts from Wells Fargo point out that in today’s US Factory Orders report, core capital goods orders were up solidly, which bodes well for continued strength in business investment in Q4 GDP.
“Durable goods orders rose 2.0 percent in September, which was slightly below the gain in last week’s advanced report. Nondefense capital goods orders ex-aircraft was stronger, however, up 1.7 percent which supports our outlook for a healthy pace of equipment spending through year end. That measure of future business investment was expanding at a strong 12.4 percent annualized rate over the past three months.”
“Nondurables, the new information in this report, were stronger in September, with both orders and shipments up 0.8 percent. Petroleum and coal products saw the strongest increase in nondurable shipments, highlighting the quick return to business by refineries along the Gulf Coast after Harvey.”
“The notable increase in mining machinery orders bodes well for GDP growth as energy exploration returns as a growth driver.”