US Core Durable Goods Rise in May

Orders for business equipment rose in May for just the second time this year, indicating demand for American-made manufactured goods is stabilizing.

Bookings for non-military capital goods excluding aircraft rose 0.4 percent last month after a 0.3 percent decrease in April, data from the Commerce Department showed Tuesday in Washington. Orders for all durable goods — items meant to last at least three years — declined 1.8 percent, reflecting a drop in the volatile aircraft category.

The data indicate the worst of the slump in business investment in the oil patch may be over as fuel costs steady, which would alleviate a source of weakness for the economy. Exports will probably take longer to rebound as the dollar’s appreciation makes American-made goods less competitive globally.

It’s “a welcome shift after recent declines,” said Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia, who correctly forecast the increase in capital goods orders. “So long as energy prices remain reasonably stable and the dollar doesn’t appreciate too much more dramatically, we’ll see core durable goods orders trend back.”

Stock-index futures rose, indicating equities will gain a second day, on optimism that a deal on Greek aid is within reach. The contract on the Standard & Poor’s 500 Index maturing in September climbed 0.2 percent to 2,116.8 at 8:50 a.m. in New York

via Bloomberg

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza