Preview: Due May 28 - U.S. April Durable Goods Orders - Aircraft to lead, but ex transport trend firm
We expect April durable goods orders to increase by 4.5% overall, in a rise led by aircraft, though ex transport orders are likely to confirm continued underlying strength with a second straight increase of 0.9%, which would be in line with an improvement in trend seen over the last four months.
Boeing orders suggest a strong month from civil aircraft, while the need to replenish ammunition is likely to support defense, which has a strong overlap with transport. We expect a fairly neutral month from autos. Ex defense we expect orders to increase by 0.2%.
An improvement in underlying trend ex transport is consistent with rennet data from the USM manufacturing index and most other manufacturing surveys. Prices will explain part of the gain.
We expect non-defense capital orders ex aircraft, a key indicator of business investment, to increase by 1.0%, outperforming the ex transport series for a third straight month, but probably not as sharply as in March, when an exceptional increase of 3.4% was seen.
