Durable Goods Soar on Aircraft/Defense Orders in August

Aircraft and defense drove a 4.5 percent increase in new orders for durable goods in August, exceeding economists’ expectations. Aircraft orders jumped 69.1 percent and defense orders surged 44.4 percent last month. Orders for autos and parts, however, fell 1.0 percent. When removing transportation from the mix, orders rose a much softer 0.1 percent.

Core capital goods, manufactured goods excluding defense and aircraft, fell 0.5 percent from July. Due to high business confidence supported by recent tax cuts, the dip in core capital goods is expected to be temporary. So far, the trade war with China has had little impact on the economy, but further escalation could affect confidence and spending by both consumers and businesses, said economists.