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U.S. durable-goods orders rise in September but momentum is fading leading to talk of recession – News Opener

The numbers: Orders at U.S. factories for long-lasting goods rose 0.4% in September, the Commerce Department said Thursday. It was the sixth increase in the last seven months and was fueled by strong orders for civilian aircraft.

Economists polled by the Wall Street Journal had forecast a 0.7% gain.

Core orders, seen as a bellwether for business investment, fell 0.7% in September after a 0.8% rise in the prior month. These category strips out the volatile transportation sector as well as government spending on military equipment. It is the first drop since February and the biggest since March 2021.

Key details: Orders for civilian aircraft jumped 21.9% in September. Orders for cars and trucks rose 2.2%.

Excluding transportation, order fell 0.5%.

Big picture: Durable-goods orders are reported by the government in nominal terms, so it is hard to discern the impact of inflation on the data. Economists say it appears business investment is moderating as suggested by surveys from regional Federal Reserve district banks.

Looking ahead: “It now looks increasingly likely that manufacturing will slip into recession in the months ahead. The sector has outperformed the survey data for much of this year, but that gap is now narrowing as two of its biggest supports—rising auto output and resilient capex—are fading fast,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.

Market reaction: U.S. stocks
DJIA,
+1.47%

SPX,
+0.32%

were set to open higher on Thursday. The yield on the 10-year Treasury note
TMUBMUSD10Y,
3.945%

rose to 4.04%.

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