Core cap ex weak, Claims in line

After falling 13.1% in Aug due to a sharp fall in aircraft orders, Sept Durable Goods orders rose 9.9% m/o/m. This is above expectations of up 7.5% and orders were up 2% ex transports, also better than the estimate of up .9%. BUT, non defense capital goods ex aircraft, the core cap ex component, was flat vs the forecast of up .8% and also Aug was revised lower to a gain of just .2% vs the initial report of up 1.1%. This follows a 5.6% drop in July and 2.7% fall in June, thus highlighting the anemic cap ex spending over the past 4 months whether due to the European recession, Asian slowdown and/or our own fiscal ineptitude. On a y/o/y basis, this key component is down 10%. Shipments rose .8% after a 2.9% drop in Aug and are up 2.6% y/o/y. Inventories rose just .3% and the inventory to shipments ratio fell to 1.66 from 1.67. Separately, Initial Jobless Claims totaled 369k, 1k less than expected but last week was revised up by 4k to 392k. Averaging the 2 weeks of CA distorted data was 367k. The 4 week avg rose to 368k from 367k, but below 370k for a 3rd straight week. Continuing Claims fell by 2k and Extended Benefits were lower by 46k. Again, the pace of firing’s are hovering near the lowest since the Spring of ’08 but the level of hiring’s remain punk with next week’s payroll est only up 120k.

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