Factory Orders: Anemic Growth, Hints of Stabilization

Bottom Line: Factory orders fell slightly less than expected in August and are now down 1.9% year-on-year. Boeing's 737 Max grounding and limited production remain a major issue for the US manufacturing sector with externalities that are difficult to gauge. Even excluding transportation, orders were flat in August and down 1.5% year-on-year. Nondefense capital goods shipments ex-aircraft rose slightly, though, in August and are still up 1.4%. Overall, core capital goods orders remain in a downtrend. Factory Orders FELL by 0.1% in August, compared with market expectations for an increase of 1.0%. Durable goods orders climbed by 0.2%, as previously reported, while nondurable goods orders slipped by 0.3%. Excluding orders for defense goods, civilian aircraft and petroleum products, (so called) core factory orders ROSE by 0.3%. Factory orders are now 1.9% BELOW their year ago level but the year-over-year growth rate has declined moderately over the past year (from 10.3% a year ago to the current -1.9%).