Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       

Blog Home
   Brian Wesbury
Chief Economist
X •  LinkedIn
   Bob Stein
Deputy Chief Economist
X •  LinkedIn
  New Orders for Durable Goods Increased 3.3% in April
Posted Under: Data Watch • Durable Goods
Supporting Image for Blog Post

Implications: A very solid report out on durable goods this morning. New orders for durables rose 3.3% in April, with all major categories of orders up for the month. The largest gains were in the transportation sector – aircraft and autos – which is extremely volatile. However, orders were still up 1.3% excluding transportation, much better than the consensus expected. The worst news in the report was that shipments of "core" capital goods, which exclude defense and aircraft, were down 1.5% in April. This suggests business investment in equipment will be tepid in Q2, consistent with our forecast of 2.5% real GDP growth for the quarter. But new orders for core capital goods increased 1.2% in April and unfilled orders were up 0.9%. This hints at an acceleration in business investment beyond Q2. We expect orders to continue to trend upward over the next several months. Monetary policy is loose and, for Corporate America, borrowing costs are low and balance sheet cash and profits are at a record high. Meanwhile, the obsolescence cycle and higher capacity use should goad more firms to replace and build-out their capital stock. In addition, the recovery in home building should generate more demand for big-ticket consumer items, such as appliances. The bottom line is that today's report shows the Plow Horse economy is moving along just fine and may even be starting to pick up its gait.

Click here for a PDF version
Posted on Friday, May 24, 2013 @ 11:03 AM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
Follow First Trust:  
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2024 All rights reserved.