There is a little for everyone in the latest BWB (Baffle with BS) data point - durable goods. The headline number printed at +1.1%, on expectations of a 0.5% rise, up from a downwardly revised -0.2% (from 0.2%). So a beat even as the baseline was cut. However, when stripping out the extremely volatile transports number, the result was very different and at +0.4%, it was a miss of expectations of 0.7%, although still up from the April -0.6%. Finally, actual Capital Goods shipments excluding non-defense rose 1.6% on expectations of a 1.9% increase. In other words: a beat when including volatile fluff, a miss on the core. The inventory/shipments ratio slipped to 1.63, lowest reading since Dec. 2011; may “imply weaker times ahead,” says Bloomberg economist Rich Yamarone. Is this good enough for the Fed to push on with the NEW QE: it is unclear. Which is why next Friday's NFP will once again be watched by everyo8ne and be the latest "most important payrolls number ever."
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New Orders
New orders for manufactured durable goods in May increased $2.3 billion or 1.1 percent to $217.2 billion, the U.S. Census Bureau announced today. This increase, up following two consecutive monthly decreases, followed a 0.2 percent April decrease. Excluding transportation, new orders increased 0.4 percent.
Excluding defense, new orders increased 0.7 percent. Transportation equipment, up three of the last four months, had the largest increase, $1.7 billion or 2.7 percent to $63.1 billion. This was led by nondefense aircraft and parts, which increased $0.4 billion.
Shipments
Shipments of manufactured durable goods in May, up five of the last six months, increased $1.5 billion or 0.7 percent to $224.1 billion. This followed a 0.7 percent April increase.
Transportation equipment, also up five of the last six months, had the largest increase, $1.0 billion or 1.6 percent to $65.1 billion. This followed a 3.5 percent April increase.
Inventories at new all time high:
Inventories of manufactured durable goods in May, up twenty-eight of the last twenty-nine months, increased $1.8 billion or 0.5 percent to $365.8 billion. This was at the highest level since the series was first published on a NAICS basis in 1992 and followed a 0.3 percent April increase.
Transportation equipment, also up twenty-eight of the last twenty-nine months, had the largest increase, $1.5 billion or 1.4 percent to $108.2 billion. This was also at the highest level since the series was first published on a NAICS basis.