NAM: Monday Economic Report
New orders for durable goods rose 0.4% in August, extending the 11.7% gain in July and rising for the fourth straight month despite growing well below the consensus estimate of around 1.5%. Overall, the durable goods manufacturing sector has continued to rebound from steep declines in March and April due to the COVID-19 pandemic, but current activity remains off 4.6% from the pace in August 2019.
Despite the slower-than-expected headline number for durable goods, nondefense capital goods excluding aircraft (or “core capital goods”)—a proxy for capital spending in the U.S. economy—rose 1.8% to the highest level since July 2018 and increased 2.8% year-over-year.
The IHS Markit Flash U.S. Manufacturing PMI notched the best reading since January 2019, bouncing back from springtime declines that were the worst since the Great Recession. Manufacturers remained cautiously upbeat about continued increases in production, albeit with some easing in September’s survey. Regional surveys from the Kansas City and Richmond Federal Reserve Banks also reported continuing expansions in activity in September.
Meanwhile, the IHS Markit Flash Eurozone Manufacturing PMI rose to the best reading since August 2018, but overall business activity in Europe slowed to a near halt in September, with the Flash Eurozone PMI Composite Output Index dropping from 51.9 to 50.1 on renewed contractions in the service sector.
Existing and new home sales both rose at the fastest paces since 2006 in the latest data, buoyed by historically low mortgage rates. Overall, the housing market remains a bright spot in the economy, but inventories of homes for sale remain very low.
Initial unemployment claims changed little, totaling 870,000 for the week ending Sept. 19. Unemployment remains stubbornly high, averaging nearly 973,750 over the past eight weeks. Meanwhile, there were 12,580,000 continuing claims for the week ending Sept. 12, which was consistent with 8.6% of the workforce.
There were 26,044,952 Americans receiving some form of unemployment insurance benefit for the week ending Sept. 5, down from 29,768,465 for the week ending Aug. 29.