Economic data

May Durable Goods fell 1.1%, a touch better than the expected drop of 1.4% but ex transports were a touch light as it rose .9% vs the forecast of 1%. Including the April revision upwards, the ex transport figure was in line with estimates. Non Defense Capital Goods ex Aircraft orders bounced back 2.1% after a 2.7% fall in April and that is the true bright spot within the data. It’s now up 18.4% y/o/y. Shipments which follow orders and get plugged into GDP, fell .4% but after gains in the prior two months. Inventories did rise .8% and the inventory to sales ratio rose to 1.55 as a result but remains well below the high of 1.83 back in Jan ’09. Bottom line, notwithstanding the headline # where a 30% drop in aircraft sent it lower, cap spending still remains pretty good and manufacturing has been the beneficiary. We should be thankful for the strong balance sheets of corporate America and hope they continue to invest.

Initial Jobless Claims totaled 457k for the week ended June 19th, 6k below expectations and is down from 476k last week which was revised higher by 4k. The figure of 457k remains very elevated at this stage of an economic recovery but it’s a 6 week low. Continuing Claims thru 26 weeks fell by 45k but were in line with expectations. Extended benefits past 26 weeks rose a net 45k. Bottom line, it was good to see the drop off in claims following last weeks spike but the absolute level still remains high and points to a still sluggish labor market. The Gulf mess hasn’t yet shown up in the data as the Labor Dept reported that for the week ended June 12th, Mississippi, Louisiana and Alabama actually had declines in initial claims filings.

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