Durable Goods: Pockets of Strength
April durables orders weak, jobless claims rise - Yahoo! News
New orders for U.S. durable goods rose by a weaker-than-expected 0.6 percent in April as volatile transportation orders fell, while initial claims for jobless benefits rose by 15,000 in the latest week, government reports showed on Thursday.
I frequently criticize the way economic data are reported (seasonally adjusted, month-to-month change) and the way they are often interpreted. In this case, it seems that both are painting a picture that is consistent with my own read - weakening but not too weak. Here is the chart of overall durables measured as the unadjusted year/year change as illustration:
A little spike up this month, but not enough to call an end to the recent slide.
Since everyone seems to be callint this one about right, I decided to look for the industry groups that don’t fit the mold - either clearly weakening or clearly strengthening. I found a few pockets of strength.
I start with primary metals. Orders and shipments are clearly trending up, while inventory growth is being reigned in. About the only thing to watch out for is the flat backlog.
A similar, if not stronger, story applies to electrical equipment, appliances and components:
Transportation equipment seems to be getting back on track, gaining ground or taking off (depending on the mode of transportation.)
Particularly nondefense aircraft and parts.
The stronger industries may be better poised to weather a downturn and could also be leaders into a reaccelerating economy.
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