The manufacturing sector appears to be sliding deeper into contraction. Headline orders for durable goods fell
-1.1% m/m, and after the previous month’s weak +0.3% m/m increase, the y/y rate fell to an alarming -5.4%. While at least part of the decline was due to the grounding of the Boeing 737 Max and the GM strike, even after stripping those items out, core orders fell, losing -0.5% m/m, the second straight decline, to -0.8% y/y. Shipments of core durable goods, which are a direct input into GDP, fell -0.7% m/m to a very weak +0.4% y/y rate. The housing market continues to struggle despite lower mortgage rates. Housing starts, permits, existing home sales, and new home sales all fell in September, respectively losing -9.4% m/m, -2.4% m/m, -0.7% m/m, and -2.2% m/m. However, as the data is volatile, all four measures remain positive on a y/y basis.
