US: August trade and durable goods data disappoint – Nomura

Analysts at Nomura point out that the US durable goods orders excluding volatile transportation components increased 0.1% m-om in August, below expectations (Nomura: 0.6%, Consensus: 0.4%), indicating somewhat weaker momentum in the industrial sector moving through Q3.

Key Quotes

“Total durable goods orders rose 4.5% m-o-m, driven by a sharp 69.1% m-o-m jump in orders for nondefense aircraft, a typically volatile series. Orders for vehicles and parts declined 1.0% m-o-m in August.”

“Orders for core capital goods (nondefense capital goods excluding aircraft) fell 0.5% mo-m after a strong gains over the past four months.”

“Advance goods trade deficit widens as good exports slow further

The advance goods trade balance registered a $75.8bn deficit in August, wider than expectations (Nomura: $69.0bn, Consensus: $70.6bn). Goods exports fell 1.6% m-o-m in August with broad-based declines and have been slowing since May after a transitory jump in export orders for agricultural goods and other US products ahead of imposition of retaliatory tariffs from US trading partners.”

“Q2 GDP, third estimate, shows upward revision to core PCE inflation

The third estimate of Q2 real GDP growth registered 4.2% q-o-q saar with few surprises in the subcomponents. Real GDI growth was revised down 0.2pp to 1.6%, lowering the average of real GDP and GDI growth to 2.9%, consistent with our current assessment of underlying economic momentum around 3%.

Core PCE price inflation was revised up to an annual rate of 2.11% q-o-q in Q2 from 2.01% previously, largely due to higher nursing home service prices likely based on BLS’ revised producer price index data.”