US DATA
February's advance report on durable goods manufacturers’ shipments, inventories and orders was stronger than expected, even considering modest downward revisions to prior for most major indicators. The bigger picture in these volatile series is that while investment growth remains sluggish, it picked up strongly in February versus a worryingly weak January.
- Headline durable goods orders rose by 1.4% M/M, vs 1.0% expected and a considerable bounce from -6.9% prior (rev from -6.2%), while ex-transportation orders rose by 0.5%, vs 0.4% expected and -0.3% prior (rev from -0.4%).
- Nondefense ex-aircraft capital goods orders growth - probably the best proxy for US business investment among the major categories in the report - was on the strong side at 0.7% M/M (and at 0.746% unrounded was nearly an even bigger beat vs the 0.1% expected, -0.4% prior rev from 0.0%), with the equivalent shipments category -0.4% M/M (0.1% expected, 0.8% prior rev from 0.9%).
- For perspective, orders had contracted in 4 of the previous 5 months on a M/M basis.
- While both shipments and orders have merely been flat-to-slightly higher since mid-2022, the February data suggests that there is no imminent sign of a downturn in business investment.
US$ B, Seasonally AdjustedSource: Census Bureau, MNI
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