... we just don't know where.
Moments ago the Census Bureau reported the February Durable Goods number which beat expectations of a 0.8% sequential increase, rising instead by 2.2% (which still resulted in barely a 0.2% increase compared to last February). Why? All thanks to defense and non-defense aircraft orders, which jumped by 21.1% and 13.6% in February, respectively. Strip those away, and the Durable Goods number ex very volatile Transports rose a modest 0.2% in the month, below the expected 0.3%, with the January data print further revised lower from 1.1% to 0.9%. In other words, the "harsh weather" did not impact airplane orders, it did however impact all other orders.
The other problem, however, and a far bigger one is that the long overdue CapEx recovery continues to not appear, and in fact in February, Capital Goods non-defense ex aircraft tumbled 1.5% compared to expectations of a 0.5% rise, with the January increase of 1.7% cut by more than half to just 0.8%. Ooops.
The silver lining: shipments (based on prior orders), which missed by less, printing at 0.5%, compared to expectations of 0.8%, and the January number revised from -0.8% to -1.4%.
In summary - yet another ugly report top to bottom.
And here are the charts that matter - see if you can spot either the so-called recovery, or the capex recovery?
Durable Goods total:
And Durable Goods ex transports: