November 30, 2005 – Based on yesterday’s data for U.S. durable goods, real non-defense capital good shipments excluding aircraft rose by 2.1% in October, more than reversing September’s 1% decline (Chart 1).
Growth in these capital good shipments averaged 1.1% per month for the 3 months through October – their strongest 3-month gain since February (Chart 2).
October’s firm 3-month trends in both new orders and unfilled orders for non-defense capital goods excluding aircraft also bode well for future shipments. Real new order growth averaged 1.1% per month for the 3 months through October (the same as shipments) and real growth in unfilled orders averaged 0.9%.
As of October, Q4 real non-defense capital good shipments excluding aircraft were rising at an impressive 18.4% annual rate, compared to their Q3 average (Chart 3).
Although the correspondence isn’t perfect, these data suggest a strong start for real business equipment & software investment in the first month of Q4.