INDICATOR: April Durable Goods Orders
KEY DATA: Orders: +3.3%; Excluding Aircraft: +1.9%; Business Capital Expenditures: 1.2%
IN A NUTSHELL: “Neither weakness abroad nor dumb policies at home can prevent the manufacturing sector from growing.”
WHAT IT MEANS: We have China slowing sharply (though how much is anyone’s guess as it is hard to believe their numbers), Europe going nowhere and Washington putting up stop signs wherever it can yet manufacturing continues to grow. Durable goods orders rebounded from a sharp decline in March to post a solid gain in April. Improving conditions were seen across the economy as machinery, electrical equipment, metals, motor vehicles and communications equipment all posted solid gains. The only weakness was in computers, which after surging in February has faltered for the past two months. In addition, it appears that businesses are buying into the full recovery story as the closely watched measure of investment, capital goods excluding transportation and defense was up solidly for the second consecutive month. Order books are filling so production should begin to pick up soon.