US: Durable goods orders increased 0.8% - Nomura

Analysts at Nomura note that the US aggregate durable goods orders increased 0.8% m-o-m as a sharp decline in civilian aircraft orders was offset by a jump in vehicles and parts orders and defense aircraft and parts.

Key Quotes

“Orders for defense aircraft and parts increased to their highest level since October 2001, suggesting a pickup in near-term defense spending, consistent with the budget deal from earlier this year that increased FY18-19 defense appropriations.”

“Ex-transportation durable goods orders were up only modestly by 0.1%, following an upwardly-revised 0.3% gain (previously reported as 0.1%).”

“Continued moderation in shipments and new orders of nondefense capital goods ex-aircraft highlights downside risk to equipment investment growth in coming quarters. While survey-measured investment plans still remain elevated, increased trade tensions, stronger US dollar and weak foreign growth remain a risk.”