August durable goods orders flat, better than expected 0.4% drop

• The prior month's reading stood at +1.1%.
• Excluding transportation, orders rose 0.3%, versus an anticipated 0.6% increase.
• The previous ex-transport figure was +0.4%.
• Excluding defense, orders gained 0.1%, compared with the prior month's +1.3%.
• Non-defense capital goods orders excluding aircraft increased 1.6%, compared with a forecast of 0.5%.
• The prior reading for this category was +0.2%.

The S&P Global PMI, the major data point this week, pointed to a strengthening US economy. While the headline figure was flat, core orders are more indicative of the underlying economic direction, and that number came in strong, supporting a bullish outlook. The market showed no immediate response, but this report adds another element to the case for a hawkish stance.