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Headline durable goods order climbed 6.5% in June. That’s well above the 2.9% increase expected by economists surveyed by, and quite a turnaround from the revised 0.1% drop recorded in May.
The headline numbers weren’t nearly as good as they seemed. Orders Ex-transport (that is once you discounted the huge month to month swings that the timing of aircraft orders can produce in this data) were up only 0.2%, lagging the 0.5% growth expected by economists.
And the very important category of non-defense capital goods orders–which is essentially a proxy for business investment–slipped 0.1%. Slow business investment has been one factor dragging down growth in the economy as a whole for much of the current recovery.
And speaking of growth as a whole, while non-defense capital goods orders dipped, actual shipments on non-defense capital goods climbed 0.2%. That follows on a 0.4% increase in May.
Those two plus readings are positive factors for the advance report of second quarter GDP scheduled for release tomorrow. The consensus projection by economists surveyed by is for 2.8% year over year growth. The final growth rate for the first quarter was a meagre 1.4%
In other economic news this morning initial claims for unemployment climbed a bit to 244,000 against 234,000 in the prior week. Economists had expected initial claims of 240,000. Anything below 250,000 indicates a healthy labor market