After April weakness, May durable’s about in line

Durable Goods orders in May rose 1.1%, above estimates of up .5% but April was revised downward to a decline of .2% from an initial gain of .2%. Also, orders ex transportation were light relative to expectations, up just .4%. Non defense capital goods ex aircraft were up 1.6% vs the estimate of up 1.9% but April was revised up. While the breakdown in orders were mixed, the data overall were not that much different than forecasts after the weakness seen in April and it’s why there is very little market reaction. Shipments, which get directly plugged into GDP, were higher by .7% and because inventories were up .5%, the inventory to shipments ratio fell to a 5 month low.

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