Headline Aug Durable Goods orders and ex transports both fell by .1% vs expectations of down .2%. Importantly, Non defense capital goods ex aircraft rose 1.1% vs an expected gain of just .4% and July was revised up. Shipments, which get directly plugged into GDP, fell by .2% after a 2.1% rise in July and because inventories rose by .9%, the inventory to shipments ratio rose to 1.82 from 1.80. Bottom line, August as we all know was when the global economy started to roll as Europe flared up, among other things, and today’s August data was better than feared. This data point though is subject to large revisions and Sept business likely remained volatile so we need to see more months of data in what is now a new economic reality compared to pre August #’s to draw any confident conclusions. Large companies are cash rich but also have historic debt levels (some only look at one side of the balance sheet). Turning the cash though into more property, plant and equipment is what many are waiting and hoping for
