US Durable Goods Orders: A welcome reprieve but the downtrend is firmly negative - Wells Fargo

Data released today showed that Durable Goods Orders rose 2.0% in June. According to analysts at Wells Fargo, this is a better than expected report, to be sure, but they warn the trend in durable goods orders remains decidedly weak with the three-month annualized growth rate off 13.0%. They see that worries about a global growth slowdown and trade tensions have not abated. 

Key Quotes: 

“Civilian aircraft orders rose $2.7 billion, which comprised more than half of the overall increase in durables this month. Given the ongoing challenges at Boeing, the surge in aircraft orders is a curious development and not likely repeatable.”

“Even after backing out aircraft orders, non-defense capital goods rose 1.9% in June—the best monthly increase in over a year and a welcome improvement in an otherwise soft area.”

“A better than expected outturn for shipments of core capital goods signals the expected decline in equipment spending in tomorrow’s GDP report may not be as bad as feared.”