Preview: Due May 24 - U.S. April Durable Goods Orders - Underlying trend remains near flat
We expect April durable goods orders to fall by 0.8% after a rise of 0.9% in March (after annual revisions were released on May 14) with a 0.3% increase ex transport to follow an unchanged March. Underlying trend remains close to flat.
Boeing data suggests aircraft will slip after two straight gains while autos may also correct lower after an above trend rise in March. Defense, which has a large overlap with transport, may however pick up after two straight declines. We expect orders ex defense to fall by 1.0% after a 1.1% March increase.
The ex-transport trend has been near flat for well over a year with no large out of trend moves. The ISM manufacturing new orders index slipped back below 50 in April but its trend has improved in recent months, suggesting a modestly positive ex transport figure is likely to follow a flat March.
We expect non-defense capital orders ex aircraft, a key indicator of business investment, to also rise by 0.3%. This series is a little more volatile than the ex transport one but trends are similar.
