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  New orders for durable goods declined 1.3% in March
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Implications:  Today's report on durable goods was rip-roaring positive on business investment and confirms the V-shaped recovery.  Although overall orders fell 1.3%, all of the decline was due to a huge drop in orders for civilian aircraft, which is the most volatile part of the report and very likely to be temporary.  Excluding the transportation sector, orders increased 2.8%, the largest gain since 2007.  Ex-transportation orders are up at a 15% annual rate in the past six months.  Orders for industrial machinery are particularly strong, up 8.6% in March and up 22.3% in the past year, the strongest 12-month gain since the early 1980s.  Meanwhile, shipments of "core" capital goods (which exclude defense and aircraft) increased 2.2% in March (3% including upward revisions to February).  Moreover, orders for core capital goods are once again running ahead of shipments, suggesting further strength ahead.  Cash-rich companies (who are earning essentially zero percent interest on their money) are deciding to invest their cash.  This is consistent with an acceleration in private-sector payroll gains over the next few months.

Click here to view the full report.

Posted on Friday, April 23, 2010 @ 11:45 AM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
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