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 Rose 3.1% in February
Posted Under: Data Watch • Durable Goods

 

Implications:  Durable goods bounced back in a big way in February after a brief breather in January.  Led by a rise in orders for commercial and defense aircraft, orders increased 3.1% in February and are up a healthy 8.9% in the past year.  More importantly, orders excluding the typically volatile transportation sector rose 1.2% in February, handily beating the consensus expected rise of 0.5%. The details of non-transportation orders show most major categories rose in February, with primary metals, fabricated metal products, machinery, and electrical equipment, appliances & components all higher. With tax reform signed into law in late December – including a shift to full expensing for business investment instead of depreciation over several years – we expect orders (particularly machinery orders) to pick up further in 2018 as companies increase investment. The best news in today's report was a 1.4% rise in shipments for non-defense capital goods excluding aircraft.  If unchanged in March, these "core" shipments – the calculation most relevant to government calculations of business investment for GDP purposes – will be up at a 6.6% annual rate in Q1 vs the Q4 average.  And "core" orders moved higher in February as well, rising 1.8% following a moderate decline in January, suggesting "core" shipments will continue to rise in the coming months.  With the exception of a small decline in orders for computer and electrical products, there was little to disappoint in today's report. That said, data is volatile from month-to-month, and what is most important is that the trend continues to point to improved economic activity and healthy investment by companies. On the employment front yesterday, new claims for jobless benefits rose 3,000 last week to 229,000, while continuing claims fell 57,000 to 1.83 million.  To put the health of the labor market in perspective, continuing claims are now at the lowest level going back to 1973, while initial claims are three weeks away from the longest streak ever of consecutive readings under 300,000.  These figures are consistent with continued healthy job growth in March, though expect a pace that's likely to be slower than the 300,000+ jobs gain we saw in February.

Click here for PDF version

Posted on Friday, March 23, 2018 @ 10:56 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.