Via Bloomberg:
The April durables report lived up to its reputation as a volatile series but this time it was not just in the new numbers but in revisions. Net, durables are still notably healthy. New factory orders for durable goods in April surged 2.9 percent after a revised no change the month before. The headline number topped analysts' projection for a 1.5 percent comeback. The jump in the headline number was led by huge boost in the transportation component.
Excluding the transportation component, new durables orders slipped 1.0 percent after a 4.8 percent spike in March. The swing was largely in civilian aircraft. However, taking into account the March strength in ex-transportation, the relatively small decline in ex-transportation leaves new orders at healthy levels.
Nondefense capital goods orders excluding aircraft fell back 2.4 percent in April after a sharp 6.5 percent boost the month before. Shipments for this category-and source data for equipment investment in GDP-edged up 0.2 percent in April, following a 2.3 percent increase the month before.
Year-on-year, overall new orders for durable goods in April were up a robust 18.9 percent, compared to 17.3 percent in March. Excluding transportation, new durables orders stood at up 18.0 percent, compared to 19.2 percent in March.
The bottom line is that after taking into account monthly volatility, durables orders are still strong at both the headline and core levels. If manufacturing growth is slowing, it is too early to tell from this report.
How much longer until inventory levels will been fully replenished? The Consumer may be alive after all. Though, it is still too early to draw any substantial conclusions from this report. I look to the later summer months to give us a better indicator.
Patrick M Ambrus
Managing Partner
Analyze Capital LLC
ambrus.anlzgroup@gmail.com
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