Preview: Due June 27 - U.S. May Durable Goods Orders - A correction lower in a near flat trend
We expect May durable orders to decline by 1.1% delivering the first decline in three months, while orders ex transport fall by 0.2% in a correction from a 0.4% increase in April.
Transport is likely to slip with Boeing data suggesting weakness in aircraft and defense, which has a large overlap with transport, likely to correct from a strong rise in April. Ex defense, we expect a 1.0% decline after a flat April.
Ex transport trend is near flat and after an above trend April risk is for a modest decline in May, particularly with the ISM manufacturing new orders index having fallen significantly.
We expect non-defense capital orders ex aircraft, a key indicator of business investment, to be unchanged after rising by 0.2% in April, a little less than seen from the ex-transport series.
