U.S. September durable goods orders rise 1.8%, topping estimates

• The previous month's reading showed no change at 0.0%.
• Excluding transportation, orders increased 0.5%, compared with an expected 0.6%.
• The prior month's ex-transport figure was +0.3%.
• Excluding defense, orders rose 2.2%, up from 0.1% in the prior month.
• Non-defense capital goods orders excluding aircraft climbed 0.5%, below the 0.7% forecast.
• The prior reading was +1.6%.

Over the past year, durable goods orders have moved sideways, and the latest data fits that pattern. The increase is welcome, but it follows a prolonged period of stagnation.

Although the core reading is stronger, the durable goods report seldom triggers major market reactions, even with a difficult Federal Reserve decision approaching.

Turning to Whirlpool, the appliance maker posted grim earnings yesterday. Its shares dropped 5% before the market opened, reaching their lowest level since the worst of the financial crisis. The stock has declined 90% from its 2021 high. Whirlpool has been in a steep downturn due to the severe housing market slump in the US. While tariffs should have provided a boost, the company has failed to gain momentum and is now burdened by significant debt.

David Tepper acquired a large position last year but later exited entirely. He is likely relieved given the stock's poor performance.

For context, the US Census Bureau releases its preliminary monthly report on durable goods orders at 8:30 am Eastern Time, approximately four weeks after the reference month concludes. The data tracks manufacturers' new orders, shipments, unfilled orders and inventories for products designed to last at least three years, including machinery, vehicles, aircraft, appliances, computers and electrical equipment.

The headline number measures the month-over-month change in total new orders and is known for its volatility. Commercial aircraft orders, heavily influenced by Boeing, tend to be erratic and can shift the headline by multiple percentage points in either direction within a month. Consequently, market participants focus on orders that exclude transportation, removing aircraft and motor vehicles. Defense orders also add variability.

The most closely tracked metric is core capital goods orders, officially called nondefense capital goods excluding aircraft. This figure acts as a proxy for business investment, indicating whether firms are increasing spending on equipment. Shipments of core capital goods are also crucial since they directly affect the equipment investment component of GDP, often prompting economists to revise their growth projections.

The preliminary figures are updated roughly a week later in the comprehensive factory orders report, which includes nondurable goods. Revisions can be substantial, especially for the more volatile categories.

The durable goods report seldom causes large market swings but can alter expectations for capital expenditure. In recent years, it has reflected trends such as tariff-related stockpiling, supply chain moves back to the US, and significant spending on data centers and power equipment driven by artificial intelligence.