A Very Pleasant Surprise from Durable Goods

A350_XWBDurable goods figures are one of the most volatile economic releases issued each month. The Commerce Department report for May shows a very positive surprise of 3.6% to a seasonally adjusted $231 billion. Bloomberg was calling for 3.3% and Dow Jones was calling for 3.2%. Even April was revised higher to 3.6% from 3.3%. On an ex-transportation basis, the May reading came in up by 0.7% and that was better than the -0.1% expected by Bloomberg.

While this is one of the most volatile readings, it is a pleasant surprise considering that May was the month that many of the regional reports started turning against the bulls. Aircraft contributed to the gains. Excluding defense, orders were up 3.5% in May, versus a gain of 2.5% in April.

Shipments of manufactured durable goods in May makes for gains in three of the past four months. This rose by $2.8 billion, or 1.2%, to $229.7 billion. Unfilled orders for manufactured durable goods are also up three of the past four months in May, and rose by $8.1 billion, or 0.8%, to $1.0047 trillion.

But note that this is a May number and we are now effectively at the end of June. That being said, investors are looking for a reason to buy the weakness as J.P. Morgan's chief equity strategist said to buy the stocks on weakness. We have the S&P 500 futures up more than 10 points and the DJIA futures up about 80 points.

Filed under: Economy
Read Full Story

Sign up for Breaking News by AOL to get the latest breaking news alerts and updates delivered straight to your inbox.

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.