Capital Spending Renaissance Deferred Once More As Nondefense Cap Orders Ex-Aircraft Tumble In February

While last month's durable goods was a huge headline miss of -5.2% due to a collapse in Boeing aircraft orders (just 2), the internals were strong with the core capex spending for nondefense capital goods ex-aircraft soaring 6.3%. Today, the situation is flipped with the headline number soaring by 5.7%, trouncing expectations of a 3.9% print. However, this was due entirely to the unbearably volatile transportation series, which in February saw a 95% surge in Nondefense aircraft and parts and a just as massive 68% surge in defense capital good new orders, driven once again by Boeing which reported nearly 200 airplane orders. As a result durables ex-transportation dipped by 0.5%, on expectations of a 0.6% increase, while the true core capex: non-defense capital goods orders excluding aircraft tumbled by -2.7% on expectations of a modest -1.1% decline. And with that last month's rise in Year-over-Year core Capex is over and the trendline continues into negative comps territory once more. So much for the great capex renaissance.

Finally, just in case there was any confusion that all that piled up inventory is finally being sold, it isn't: "Inventories of manufactured durable goods in February, up sixteen of the last seventeen months, increased $1.6 billion or 0.4 percent to $376.9 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 January increase."

True core CapEx: Nondefense Capital Goods New Orders Ex-Aircraft Year over Year

Headline Durables:

Durable Goods ex-Transportation: