The U.S. factory goods data modestly beat estimates
The U.S. factory goods data modestly beat estimates across the board thanks to August gains of 0.2% for nondurable shipments, orders and inventories that defied price weakness, alongside small upward revisions in all the durables data for orders, shipments, inventories and equipment. Analysts still expect Q3 GDP growth of 2.5%, but today's data lifted prospects modestly, versus today's trade data that lowered prospects. Analysts still expect a 2% Q3 contraction rate for real equipment spending after a 2.9% Q2 rate of decline. Analysts expect a $1 B inventory subtraction from Q3 GDP growth that leaves a $10 B liquidation rate, after five prior consecutive quarterly subtractions that culminated in a big $50.2 B subtraction in Q2 and a $9.5 B liquidation rate. Analysts expect a 0.2% August business inventory rise, given an assumed 0.1% wholesale inventory drop but a 0.5% retail inventory rise revealed in the advance indicators report.