Q2 Closes With A Durable Goods Whimper And 1.6% Y/Y Drop; Core Capex Orders Revised Much Lower; Shipments Tumble

Tyler Durden's picture


After tumbling in May by 1.0% which was the biggest drop since the dreaded "polar vortex", Durable goods in June posted a modest pick up in June rising 0.7%, driven by yet another surge in aircraft and parts which rose by 8.2% for Nondefense aircraft and 15.3% for defense (thank you Russia). And while this beat expectations of a 0.5% increase, it was the first Y/Y drop in Durable goods since February (and since 2013 if one uses unrevised data).

Excluding volatile transportation, Durable Goods rose by 0.8%, also beating the expected 0.5% print, and higher than last month's 0.1%. Still, the Y/Y change in the category is hardly indicative of sustainable growth in manufacturing production, and certainly smashes any of the ISM and Markit PMI manufacturing surveys indicating an epic renaissance in US production.


There was some modest good news in the core capex orders, aka the Capital Goods Shipments non-defense ex air, which rose 1.4%, beating expectations of 0.5%, however, this was at the expense of a major downward revision to the May number which initially had risen 0.7% and now is said to have declined 1.2%, i.e. a more than complete wash.


Finally, the piece de resistance confirming the Q2 GDP recovery is once again indefinitely delayed, were core capex shipments, which tumbled -1.0% on expectations of a 0.4% boost, and May revised lower from 0.4% to 0.1%. Stick a fork in actual CapEx.

And now, bring on the downward GDP Q2 revisions...

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Fri, 07/25/2014 - 09:03 | 5002980 GetZeeGold
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Mmmmm....more suck. So when do we get bailed in?


Welcome to your summer of recovery5.


Fri, 07/25/2014 - 09:08 | 5003006 RSloane
RSloane's picture

Don't be silly! I read on numerous well-respected financial websites that Q2 will be amazing because winter ended, winter being the main cause of a shitty Q1.

It will be amazing, I tell you!

Fri, 07/25/2014 - 09:29 | 5003089 Squid-puppets a...
Squid-puppets a-go-go's picture

except for the lack of springyness in spring. And then you have to watch out for the excessively summery summer. Then you got Fall. And thats when the stock market will, well, ..... 

Fri, 07/25/2014 - 10:08 | 5003232 lordylord
lordylord's picture

Do good rifles count as durable goods? 

Fri, 07/25/2014 - 12:21 | 5003855 KnuckleDragger-X
KnuckleDragger-X's picture

Yes if it's a good rifle....

Fri, 07/25/2014 - 09:00 | 5002984 Zeptemberalevin
Zeptemberalevin's picture

bullish. buy. moar. stawks

Fri, 07/25/2014 - 09:02 | 5002988 caShOnlY
caShOnlY's picture

+1   now I don't have to type it.

Fri, 07/25/2014 - 09:02 | 5002989 Max Damage
Max Damage's picture

Aircraft parts eh???? Now we know why 3 down in a few weeks

Fri, 07/25/2014 - 09:05 | 5002995 yogibear
yogibear's picture

Demographics is a SOB. Downsizing getting rid of excess junk and expenses.

10,000 boomers retire a day.

See loads of got-junk trucks.

Fri, 07/25/2014 - 09:07 | 5002998 Winston Churchill
Winston Churchill's picture

Fugly chart porn.

One legged, midget hookers look better.

Fri, 07/25/2014 - 09:09 | 5002999 Chuck Knoblauch
Chuck Knoblauch's picture

Any bets on the swing in Q2 GDP?

I say they report 1%, with a final revision at -4%.

So, the swing will be 5%.

Anyone else???

The swing last Q was 3%.

Fri, 07/25/2014 - 09:10 | 5003015 Winston Churchill
Winston Churchill's picture

Sounds about right , with the final revision in the middle of November.

Fri, 07/25/2014 - 09:12 | 5003021 Chuck Knoblauch
Chuck Knoblauch's picture

Of course, after the elections.

wink wink ;)

Remember you heard it here first.

Fri, 07/25/2014 - 09:14 | 5003029 Chuck Knoblauch
Chuck Knoblauch's picture

S&P 500 at record levels.

Buy buy buy?


Fri, 07/25/2014 - 09:58 | 5003141 RSloane
RSloane's picture

The S&P is such a remarkable thing....no matter what happens anywhere in the world it defies reality and does its own thing. Kind of like a paranoid schizophrenic who tries to smoke his own pajama strings. You have to admire that kind of determination.

Fri, 07/25/2014 - 09:08 | 5003012 Sudden Debt
Sudden Debt's picture

Maybe next Quarter will be better...
I'm sure that will work out fine...

Fri, 07/25/2014 - 09:11 | 5003020 Sudden Debt
Sudden Debt's picture

So doesn't that mean the economy needs to grow about 9% just to keep the "concensus" growth numbers?


Fri, 07/25/2014 - 09:18 | 5003037 Chuck Knoblauch
Chuck Knoblauch's picture

Sure, only measure government spending.

Debt Spending = Growth.

What inflation deflator?


Fri, 07/25/2014 - 09:16 | 5003039 Winston Churchill
Winston Churchill's picture

They already did, and it still can't hide how fucked we are.

Fri, 07/25/2014 - 10:44 | 5003414 Sudden Debt
Sudden Debt's picture

Oh yeah... That where a extra 4% on R&D bullshit...
Imagine somebody would do the math and subtract that 4 from the current numbers... Anybody know math?

Fri, 07/25/2014 - 11:07 | 5003505 scubapro
scubapro's picture



exactly.  and measured the previous way we are well into a recession.  high quality bonds usually do well in these periods--to the 'mysterious' (wsj, about a week ago) bond rally explained.  

the real difficulty will be which of the 10x sales and 'negative' earnings stocks to short.  twtr never recouped, amzn got pounded;  yelp perhaps;  ihtc  or ssys or athn   any other suggestions?   einhorn already has this play in action.

Fri, 07/25/2014 - 12:33 | 5003897 Winston Churchill
Winston Churchill's picture

TESLA , if you could get a longer option.

Cash flow has to be hiding horrendous losses.That piper will be paid.

Fri, 07/25/2014 - 09:18 | 5003045 NIETSNEREM
NIETSNEREM's picture

Can anyone explain why Steve Liesman on CNBS deliberately omitted the fact that Cap Goods Orders ***Shipped*** actually declined M/M and was revised lower for last month?

Fri, 07/25/2014 - 09:21 | 5003056 Chuck Knoblauch
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His salary and ugly face explains much.

He has a benefactor in high places.

It sure isn't talent and good looks.

Fri, 07/25/2014 - 09:20 | 5003058 RSloane
RSloane's picture

OoOo I can! Because he's an asshat.

What do I win?

Fri, 07/25/2014 - 09:22 | 5003065 Grande Tetons
Grande Tetons's picture

Who is this Liesman person? What the fuck is CNBS? 

Fri, 07/25/2014 - 09:53 | 5003163 RSloane
RSloane's picture

Now you're just toying with us. That particular financial channel is extremely important although no one watches it except the people that work there, and maybe their families if physically coerced. Liesman is a very important person on that channel because people avoid watching it specifically because of him. I hope I clarified that for you.

Fri, 07/25/2014 - 09:24 | 5003072 Chuck Knoblauch
Chuck Knoblauch's picture

It's going to be hell on earth in America post November 4th, 2014.

A new crew of liars working the same lies in Congress.

Fri, 07/25/2014 - 09:26 | 5003081 RSloane
RSloane's picture

Yes but its something to look forward to, yes?

Just after you change the litterbox don't you look for new cat turds to scoop up?

Fri, 07/25/2014 - 09:37 | 5003111 The Most Intere...
The Most Interesting Frog in the World's picture

To the 40% or so of you in America that are actually working, just keep your head down and enjoy the ride.

Fri, 07/25/2014 - 09:57 | 5003193 ekm1
ekm1's picture

Quantitative Easing leads to contraction of real economy by design.


House finance committee, Senate banking committee know that economy was harmed on purpose by ordering Fed to continue with QE.

Fri, 07/25/2014 - 11:01 | 5003473 scubapro
scubapro's picture


you give the policians too much credit.

Fri, 07/25/2014 - 13:16 | 5004114 windcatcher
windcatcher's picture


In reply to klm1:


Yes, 4 years of Quantitative Easing show how brainwashed stupid and gullible the American public have become. What was it last month 35 billion? Maybe, next month it will be 75 billion a month handed to the banksters.


Oh, never mind, focus on the GDP bogus chart and watch for CHANGE. ha. ha.




Fri, 07/25/2014 - 10:20 | 5003288 orangegeek
orangegeek's picture




Fri, 07/25/2014 - 11:04 | 5003493 scubapro
scubapro's picture



hmmm, magic 8 ball says gdp for Q2 to print a postive number, perhaps .9% then revised negative, so basically the new recession will be offically declared about 8 months after it started....with immediate commentary on how Q3 gdp will be positive and the recession is already over.

Fri, 07/25/2014 - 11:15 | 5003531 Bossman1967
Bossman1967's picture

I thought that GDP was gonna be over 3. for the year after figuring in the first quarter how in the hell will the people in this country ever wake up when their heads are stuck up there asses? And 42 percent think this president is competant that's the most ridiculous thing I have seen. I live in the real world and I see nobody struggling nobody hungry and our national debt again skyrocketing at 17,620,000.00 a week ago it was 17,5. nobody saying shit? gold and silver dropping like a rock too. hmm

Fri, 07/25/2014 - 12:51 | 5003994 windcatcher
windcatcher's picture


What a bunch of bull-shit. Everyone know that the intire stock market is rigged and a fraud. What makes anyone think that the GNP is not a fraud?


USA Gross Domestic Product is a bankster FRAUD (are you surprised). We are not a wealthy nation with industry, we have been de-industrialized remember? How can we have a GNP of an industrialized country? 50% of our claimed GDP is not in production but in fraudulent debt posing as a product.


Oh, and our debt ratio is WHAT?


Fri, 07/25/2014 - 14:11 | 5004368 Obamanism
Obamanism's picture

I predict that Q2 to Q4 there will be a rise in durable goods, due to all the Illegal Aliens children being process and the "Foster" homes having to buy Beds, TVs, computers, tablets, etc and the transportation of these children cost money, invest in Greyhound and long distance buses. Oh, I forgot the rise will be due to the Federal money (welfare Tax dollar) being given to them.

Illegal aliens will jump start the consumer boom. Then the crime wave, then the welfare riots ......

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