US April Durable goods orders: Not a good report - ING

According to Rob Carnell, Chief International Economist at ING, today’s US durable goods order report looked good but it was not, mainly because of the core capital goods shipments and orders. 

Key Quotes:

“US GDP has not been helped in recent quarters by two consecutive contractions in business investment and tracking this is key to understanding whether the slowdown in the US economy since 2Q15 is likely to resurface, following what has been a  good start to 2Q16 so far.”

“These core orders and shipments figures remain very weak on a three month annualised basis. Core orders are running at a -8.7% pace (3mma), and shipments -10.6%. Of course, these moving averages are weighed down by the weakness of 1Q16, so focussing just on the April month on month changes, the two measures respectively changed by -0.8% and +0.3%...hardly conclusive.”

“As far as the June Fed decision goes, this data has not taken the argument very far forward. We remain slightly in favour of a July hike, but the outcome remains data dependent. Wages figures in next Friday's jobs report could prove pivotal. Keep watching the screens.”