Ship Shape: Broad Strength in Capital Goods Shipments

Source: Economics Group of Wells Fargo Bank, N.A.

Summary

Despite softening demand for goods and signs of slowing activity in regional Fed manufacturing surveys, the May durable goods report posted a stronger than expected gain for durable goods orders. A broad-based gain in core capital goods shipments should lift estimates for Q2 equipment spending.

Unexpected Strength

If you are looking for signs of slowing in the manufacturing sector, you won’t find many in the May durable goods report. A stout 0.7% monthly increase handily exceeded consensus expectations for a scant 0.1% gain. The strength was broadly based, with most categories in the black for the month. READ FULL REPORT>>