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 Fell 5.2% in January
Posted Under: Data Watch • Durable Goods

Implications: Do not be misled by the headline number of durable goods falling 5.2% in January. This decline was completely due to the very volatile transportation sector. Orders for aircraft vary greatly from month to month and in January there were big declines in orders for both defense and civilian aircraft. Taking out transportation, orders came in up 1.9%, much better than the consensus expected as companies look to be gaining more confidence. The plow horse economy continues to move forward. Machinery boomed in January with the biggest one month percent change since May 2010. Machinery orders are now up at a 69.1% annual rate in the past three months. Also, orders for nondefense capital goods excluding aircraft, a good proxy for future business investment, boomed in January rising 6.3%, the best percentage gain in over a year. Shipments of "core" capital goods, which exclude defense and aircraft, were down 1% in January, but core shipments usually fall in the first month of each quarter and then rebound in the last two months, so this decline is not abnormal. We expect a continuation of the recent upward trend in orders and shipments. Monetary policy is loose, corporate profits and balance sheet cash are at record highs (earning almost zero interest), and the recovery in home building is picking up steam. All of these indicate more business investment ahead. In other news this morning, pending home sales, which are contracts on existing homes, increased 4.5% in January and are up 10.4% from a year ago. Given this data, expect a gain in existing home sales in February.

Click here for a PDF version
Posted on Wednesday, February 27, 2013 @ 10:55 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 and the Internal Revenue Code. First Trust has no knowledge of and has not been provided any information regarding any investor. Financial advisors must determine whether particular investments are appropriate for their clients. First Trust believes the financial advisor is a fiduciary, is capable of evaluating investment risks independently and is responsible for exercising independent judgment with respect to its retirement plan 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 © 2018 All rights reserved.