Full breakdown of the impressive durable goods orders - Nomura

Anadysts at Nomura offered a full breakdown of the impressive durable goods orders.

Key Quotes:

"Durable goods orders increased by 4.8% in October, well above market expectations (Nomura: +1.5%, Consensus: +1.7%), following an upward revised 0.4% increase in the prior month (previously reported as -0.3%).

Strong performance in October is partially attributable to a sharp 94.1% jump in nondefense aircraft orders, which tend to be highly volatile. Excluding transportation, durable goods orders rose 1.0%, (Nomura: +0.8%, Consensus: +0.2%), following an upward revised 0.2% (previously reported as 0.1%). Such readings are optimistic as strong growth in orders could lead to better manufacturing activity in coming months."

"As for the indicators for current activity, total durable goods shipments grew 0.1% and core capital goods shipments (which exclude defense and aircraft shipments) increased modestly by 0.2%, marking the third consecutive month-over-month increase."

"Durable goods inventories were flat, which is somewhat weaker than what we had assumed. Q4 GDP tracking estimate: October core capital goods shipments were broadly in line with our expectations but a flat reading of durable goods inventories was slightly weaker than we had expected.

The net impact of today's durable goods report was negative to Q4 GDP tracking model. However, after rounding, our Q4 GDP tracking estimate was unchanged at 1.8%."