The 4.8% U.S. October durable orders surge
The 4.8% U.S. October durable orders surge included a solid 1.0% ex-transportation rise, alongside a 12.0% transportation pop but a 2.4% defense orders decline. Analysts saw stronger than expected equipment figures but lean data for shipments and inventories. Analysts lifted our Q1 GDP estimate to 2.0% from 1.8% after an estimated 2.2% climb in Q4, but analysts now expect a slightly smaller Q3 GDP growth boost to 3.0% (was 3.1%) from 2.9%. The Q3 GDP estimate now includes a $3 (was $2) B downward bump in factory inventories that is part of a $7 (was $6) B downward revision in inventories. Analysts expect $6 B boosts in both consumption and construction and a $1 B boost in net exports. Our 2.2% Q4 GDP estimates assumes a 3% (was 2%) growth rate for real equipment spending after a 2.7% contraction rate in Q3, with a $12 B Q4 inventory addition that leaves a still-lean $18 B accumulation rate. Analysts expect a 0.2% October factory inventory rise with a 0.3% business inventory increase, given today's flat factory durable inventory figure. Analysts assume a 3.0% October factory orders rise with a 0.6% factory shipments increase, given an assumed price-boosted 1.2% nondurable shipments and orders rise.