Core Durable Goods Orders Rise For 18th Straight Month, AI Spend Proxy Dips

After an unexpected dip in headline durable goods orders last month, preliminary September data was expected to show a significant rebound, and it did, rising 1.8% MoM. However, this was a small miss relative to the +1.9% MoM expected but the August decline was revised up to a +0.1% MoM change (from -0.1%)...

This left headline durable goods orders up a solid 10.0% YoY and ius up six of the last seven months.

Core durable goods orders rose 0.5% MoM (vs +0.6% exp) and August was also revised up. This was the 18th monthly rise in core orders in a row...

Core capital goods orders (nondefense capital goods excluding aircraft - the cleanest proxy for business equipment spending): +0.5% (missed ~0.7% consensus; prior +1.6%). Still positive but moderated.

Interestingly, a proxy for AI spend slowed last month...

This segment includes:

• Telephone Apparatus: Wired and wireless telephones, private branch exchange (PBX) equipment, and VoIP equipment.
• Broadcast and Wireless Equipment: Radio and television broadcast antennas, cellular tower electronics, and two-way radios.
• Network Equipment: Routers, switches, local area network (LAN) and wide area network (WAN) equipment, and fiber-optic transmission gear
   

Core capital goods shipments: +1.2% (beat ~0.8% expected; prior ~+0.5%). This is the more important near-term input for GDP equipment investment and points to continued strength in deliveries.

The bottom line is that the headline looked solid, largely on the back of transportation (aircraft). Underlying orders (ex-transport and core capital goods) were more modest and a touch softer than expected after August’s strong core print, but they remain in positive territory. The stronger shipments number is the brighter spot for near-term business investment momentum. As usual, the series is noisy month-to-month; the multi-month trend and core figures matter more than the headline... and they remain positive indicators for growth.