It's The Economy Stupid: Durable Goods, Cap Goods, Jobs

The Chicago Fed’s National Activity Index was 0.0, so that’s unched, nada, bumpkus

Durable Goods Orders was up a strong 9.9%

Capital Goods Orders by businesses were 0.0%, so that’s stagnant

Jobless Claims came in as expected at 369K for Initial Claims and 3254K for Continuing Claims

 

Economic Event	Period	Economic Survey	Actual Reported	Original Prior	Revised Prior
Chicago Fed Nat Activity Index	SEP	-0.2	0.0	-0.87	-1.17
Durable Goods Orders	SEP	7.5%	9.9%	-13.2%	-13.1%
Durables Ex Transportation	SEP	0.9%	2.0%	-1.6%	-2.1%
Cap Goods Orders Non Def Ex Air	SEP	0.8%	0.0%	1.1%	0.2%
Cap Goods Ship Non Def Ex Air	SEP	0.8%	-0.3%	-0.9%	-1.2%
Initial Jobless Claims	OCT 20	370K	369K	388K	392K
Continuing Jobless Claims	OCT 13	3260K	3254K	3252K	3256K

 

Durable Goods- Demand for all durable goods climbed 9.9 percent last month, exceeding the median forecast of economists surveyed by Bloomberg and reflecting a rebound in airplane orders. The median forecast of 77 economists surveyed by Bloomberg called for a 7.5 percent gain in total durable goods orders. The August reading was revised to a 13.1 percent drop, the biggest since 2009, from a previously reported 13.2 percent decrease.  Aircraft bookings, which are often volatile, surged 2,641 percent after plunging 97 percent in August, today’s report showed. Boeing Co., the Chicago-based aerospace company, said it received 143 orders in September, up from 1 the prior month and 260 in July.  A less volatile measure of bookings that excludes transportation equipment advanced 2 percent in September, the first gain in four months.

 

Capital Goods - The report today showed demand for capital equipment such as computers and communications gear stagnated last month, a sign that a slowdown in business investment and exports is hurting the world’s largest economy. Orders for non-defense capital goods excluding aircraft were little changed in September after rising a smaller-than-previously estimated 0.2 percent the prior month.  The stall in orders for U.S. business equipment in September capped a quarterly slump that signals investment will cool in the second  half of the year.  Orders for non-defense capital goods excluding aircraft dropped at a 23.5 percent annual rate in the third quarter after falling at a 5.9 percent pace in the three months ended June.  Companies from Caterpillar Inc. to Advanced Micro Devices Inc. have tempered sales projections, raising the risk that cuts in business spending ahead of looming tax and government spending changes will hold back the economy. 

 

Jobless Claims - Fewer Americans filed first-time applications for unemployment benefits last week as the seasonal volatility at the start of the quarter wound down, another report showed.  Jobless claims decreased by 23,000 to 369,000 in the week ended Oct. 20 from a revised 392,000 the prior period, the Labor

Department reported today. The median forecast of 48 economists surveyed by Bloomberg called for a drop in claims to 370,000.  Averaged over several weeks, the pace of firings has been little changed, indicating payroll gains are being restrained by a lack of hiring. The data signals employers are seeing enough

demand to maintain existing staffing levels even amid growing concern about a slowing global economy and the looming fiscal cliff of tax increases and government spending cuts that will take effect in 2013.

 

John Broussard

Assistant State Treasurer

Chief Investment Officer

State of Louisiana

Department of the Treasury