Transportation Pressures October Durable Goods Orders Lower

Daily Forex Fundamentals | Written by Wachovia Corporation | Nov 26 08 14:29 GMT |

Advance durable goods orders for the month of October plunged 6.2 percent as sharp declines in aircraft and defense contributed to the weakness. Excluding the volatile transportation sector, orders were down 4.4 percent. Today's report is more evidence that fourth quarter economic growth will be extremely weak. Economic Weakness Affecting Orders Driven by slowing business and consumer demand, orders for durable goods fell sharply last month. Weakness was broad based with significant declines reported in machinery, motor vehicle & parts, primary metals and defense orders. The increase in the inventory-to-shipments ratio to 1.68 from 1.63 in September is a worrisome trend. Fourth Quarter Durable Goods Spending Will be Weak Today's report is just more evidence that the fourth quarter has gotten off to an exceptionally weak start. Non-defense capital goods ex-aircraft orders, which is a good proxy for business equipment & software spending, fell 4.0 percent and is down an annualized 18.5 percent over the past three months. Orders will continue to retrench as spending plans readjust. Wachovia Corporation http://www.wachovia.com Disclaimer: The information and opinions herein are for general information use only. Wachovia Corporation and its affiliates, including Wachovia Bank, N.A., do not guarantee their accuracy or completeness, nor does Wachovia Corporation or any of its affiliates, including Wachovia Bank, N.A., assume any liability for any loss that may result from the reliance by any person upon any such information or opinions. Such information and opinions are subject to change without notice, are for general information only and are not intended as an offer or solicitation with respect to the purchase or sales of any security or any foreign exchange transaction, or as personalized investment advice. Securities and foreign exchange transactions are not FDIC-insured, are not bank-guaranteed, and may lose value.