Durable goods orders fell in September but not as much as economists were expecting, according to the latest data from the U.S. Census Bureau.
- Orders for manufactured durable goods fell by 0.8% in September to $284.8 billion, matching the decline recorded in August. This drop, while significant, was less steep than economists had anticipated, with expectations centered around a 1% decline.
- Despite the slightly better-than-expected result, the decline in September marks the third drop in the last four months, signaling potential weakness in the broader manufacturing sector.
September’s 0.8% decrease mirrors the drop seen in August, which has proven to be the third worst month for durable goods orders so far this year. While the headline figure shows a contraction, the details provide a mixed picture:
Breaking It Down: Durable Goods Orders Ex Transportation actually increased by 0.4% in September. However, this was a slight slowdown from the 0.5% gain reported in August. The 0.4% increase marks the third time this year that orders have risen by this amount, tying for the second-best monthly performance in 2024.
- Orders for non-defense capital goods excluding aircraft, a closely watched measure that serves as a proxy for business investment, rose by 0.5% in September. This was an improvement from the 0.3% rise seen in August and matched June’s increase, which was the highest recorded this year.
What This Means For Rates: Durable goods orders are a key indicator of economic activity, especially in manufacturing. A decline, especially over multiple months, typically signals a cooling economy, which in turn can influence monetary policy and interest rates. As economic growth slows, the Federal Reserve may be more inclined to continue with rate cuts, which could lead to a slight pullback in mortgage rates.
