Home   Logon   Mobile Site   Research and Commentary   About Us   Call 1.800.621.1675 or Email Us       Follow Us: 

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Click for Bio
Follow Brian on Twitter Follow Brian on LinkedIn View Videos on YouTube
   Bob Stein
Deputy Chief Economist
Click for Bio
Follow Bob on Twitter Follow Bob on LinkedIn View Videos on YouTube
 
  New Orders for Durable Goods Declined 0.7% in April
Posted Under: Data Watch • Durable Goods

 

Implications:  Durable goods data underwent a "benchmark revision" in April, which altered the level of overall orders and affected past monthly changes more significantly than usual. As a result, while the April durable goods orders decline of 0.7% suggests a slow start to Q2, we see no reason to sound an alarm.  Following healthy gains for overall orders in February (1.4%) and March (2.3%), a lull in April was not unexpected.  Commercial aircraft orders led the decline, though orders for most major categories fell.  Strip out the typically volatile transportation sector and durable goods orders declined 0.4%, coming in below the consensus expected gain of 0.4%.  The dip in April non-transportation orders was led by fabricated metal products and machinery.  But there is little reason for concern.  Non-transportation orders have been steadily trending higher since mid-2016 – up 4.9% in the past year – and April represents the first monthly decline since August.  Despite the dip in machinery orders in April, we expect them to pick up again in the months ahead alongside continued improvements in the energy sector, which had been pulling down machinery investment after oil prices started declining in mid-2014.  Across the board, companies may be waiting for Washington to make progress on tax reform and other issues, which could provide a boost to orders and increase investment in most durable goods sectors.  In the meantime, economic growth continues to plow ahead, with new claims for unemployment insurance increased 1,000 last week to 234,000.  The four-week moving average is a four-decade-low 235,000.  Continuing claims rose 24,000 to 1.92 million.  Plugging these figures into our models suggests robust job growth in May, with a payroll gain of around 200,000. 

Click here for PDF version

Posted on Friday, May 26, 2017 @ 10:59 AM • Post Link Share: 
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 advisors are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
First Trust Portfolios L.P.  Member SIPC and FINRA.
First Trust Advisors L.P.
Home |  Important Legal Information |  Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2019 All rights reserved.