Implications:  Durable goods orders grew at the fastest pace in nearly three years in June, as Boeing had a surge in orders for new commercial aircraft.  Still, take out orders from the consistently volatile transportation sector, and orders rose 0.2% in June.  That was below what the consensus was expecting but upward revisions to May, when added to the June gain, shows ex-transportation orders up 0.5%.  In the past year, orders ex-transportation are up 6.8%, the largest gain since 2012.  The best news in today's report was for shipments of non-defense capital goods ex-aircraft, or "core" shipments.  These rose 0.2% in June and revised upward for May.  As a result, these orders were up at a 4.2% annual rate in Q2 versus the Q1 average, representing the third consecutive quarter of healthy growth following near constant declines from late 2014 to late 2016.  In part, this reflects the fact that energy prices have been more stable since the huge decline in late 2014.  However, it also likely reflects the willingness of businesses to invest more aggressively for efficiency purposes as the labor market gets tighter.  It looks like companies may be tired of waiting for Washington to make progress on tax reform and other issues, and starting to commit to significant longer-term decisions.  In employment news this morning, initial jobless claims rose 10,000 last week to 244,000, which is also the four-week moving average.  Meanwhile continuing claims declined 13,000 to 1.96 million.  It's still early – we will update our models next week as we get more claims data plus the ADP report – but plugging today's figures into our models suggests payrolls are up about 175,000 in July.

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