US durable goods orders dropped for a second straight month in October, in line with expectations. While the decline in October was somewhat softer than expected, the previous month’s figure was sharply downwardly revised (from -0.8% M/M to - 1.5% M/M). On a monthly basis, durable goods orders dropped by 0.7% M/M in October led by weakness in transportation (-4.8% M/M). Within transportation, nondefense aircraft dropped by 16.4% M/M, while vehicles and parts rose by 6.2% M/M. Excluding the volatile transportation orders, the durables rose by 0.7% M/M, while a stabilization was expected. The breakdown shows a mixed picture as only machinery (1.6% M/M) and primary metals (3.0% M/M) orders jumped in October, while orders for electrical equipment (-5.2% M/M), fabricated metals (-0.3% M/M) and computers and electronics (-0.1% M/M) dropped. Shipments of non-defence capital goods less aircraft fell by 1.1% M/M, the second consecutive decline, a poor start to the fourth quarter.
In the week ended the 19th of November, US initial jobless claims picked up slightly. Initial claims rose by 2 000 for an upwardly revised 391 000 to 393 000, while the consensus was looking for a slightly lower outcome (390 000). The less volatile four-week moving average extended its downward trend, falling from 397 500 to 394 250. Continuing claims, which are reported with an extra week lag, rose from an upwardly revised 3 623 000 to 3 691 000, significantly above the estimated 3 621 000. The overall picture remains however intact and indicates that the US labour market is slowly improving, but job growth remains insufficient to bring the unemployment rate significantly down.