Durable Goods Orders Up, Signs of Strength in Q2 Business Spending
Orders for durable goods were up 0.8 percent in June, despite expectations of a slowdown. Stripping out the volatile transportation component, orders were up 2.0 percent - the strongest monthly gain of the year. Non-defense orders ex-aircraft were up 1.4 percent, a sign business spending may not be as weak as many expected in the second quarter.
Orders Up, Ex-Transport Orders Looking Less Weak
- Businesses scaled back in the second quarter but maybe not as much as first reported. Last month's flat number for durable goods was revised to slightly positive, while this month's solid gain suggest signs of strength.
- Ex transportation, orders were up 2.0 percent, the three month moving average shows solid positive momentum.
Ex Aircraft Orders Strengthening
- Non-defense capital goods orders ex-aircraft were up 1.4 percent in June. Business spending may be more additive to GDP than initially expected.
- While obviously a volatile series, electrical equipment orders show a sector that is doing well right now. Spending by utilities combined with strong global demand fuel this growth.
Wachovia Corporation
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