Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Bio
X •  LinkedIn
   Bob Stein
Deputy Chief Economist
Bio
X •  LinkedIn
 
  New orders for durable goods increased 0.2% in April
Posted Under: Data Watch • Durable Goods
Supporting Image for Blog Post

 
Implications: New orders for durable goods rose modestly in April, up 0.2%, and the underlying trend remains favorable, up a healthy 6.9% in the past year. However, the gain in April was due to the transportation sector, which is very volatile from month to month. Excluding transportation, orders were down 0.6%. We don't think this decline will persist. Unfilled orders (ex-transportation) are up 10% in the past year and nearing a record high. Also, we are in the early stages of a home building recovery. As housing continues to pick up steam, orders for durables should pick up as well. Some analysts might dwell on a 1.4% drop in shipments of "core" capital goods (which excludes defense and aircraft). That is a big drop. But these shipments have fallen in the first month in nine of the past ten quarters, only to rebound in the following two months. Monetary policy is loose, interest rates are extremely low, and businesses are reaping record profits while they already have record amounts of cash on their balance sheets. Moreover, capacity utilization at US factories is reaching its long-term norm, meaning companies have an increasing incentive to update their equipment. We anticipate better numbers on durables next month. In other news today, new claims for unemployment insurance dipped 2,000 last week to 370,000, matching consensus expectations. Continuing claims for regular state benefits fell 29,000 to 3.26 million. The four-week average for continuing claims is now 3.27 million, the lowest since 2008. Moreover, these claims data are consistent with a private sector payroll gain of 145,000 for May, and that's before upward revisions in later months.

Click here for a PDF version.
Posted on Thursday, May 24, 2012 @ 9:53 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.