Durable Orders Glass Half Empty--Still

The headline of durable goods orders showed twice the rise the market expected, but the details are poor and it will reinforce the sense of a marked economic slowdown taking place in early Q2. In this regard it is similar to the non-farm payroll figures in which the headline obscured the fact that the work week fell sufficiently to more than offset the net job gain.

To calculate GDP, economists look at shipments for non-defense capital good and exclude aircraft. This component fell 1.5% after a 0.5% gain in March.

The headline 3.3% rise follows the downwardly revised March decline of 5.9%. For the four months of 2013 data, durable goods orders have fallen by a cumulative 2.3%. The April rise was flatted by an 18% jump in commercial aircraft orders. Boeing reported 51 orders compared with 29 in March. Excluding transportation orders, durable orders rose 1.3%, the first gain in three months. 

The US dollar rose as short-term participants focused on the headline. US Treasuries were little changed. One interesting price response was with Us shares which ticked up on the ostensibly strong data rather than tick lower on the fear that QE may be tapered. Initial support for the euro is seen near $1.2900 and for sterling near $1.5060.