Durable goods orders contracted 1%.

Consensus was for a headline reading of no growth versus a revised 0.8% increase in April.

But excluding defence and aircraft, capital goods orders climbed 0.7%, beating expectations of 0.5% and a substantial increase from a 1.2% contraction last week. New orders for defence-related capital goods fell 31.4%.

“…The key number in the report – orders for non-defence capital equipment, ex-aircraft – rose 0.7%,” Pantheon Macro’s Ian Shepherdson said. “Even if this is ‘unch.’ in June, the quarter as a whole will be up 10% annualized, the best since Q1 2013 and consistent with our view that small firms are starting to increase capex even as sluggish earnings growth
holds back spending by larger companies. Note inventories up 1%, biggest gain since Dec. Overall, much better than the headline.”

Here’s the full rundown:

Durable goods orders: -1%, consensus 0.0% (0.8% prior)

Durables ex-transportation: -0.1%, consensus 0.3% (0.4% prior)

Capital goods shipments, non-defence, ex-air: 0.4%, consensus 1% (-0.4% prior)

Capital goods orders, non-defence, ex-air, ex-transportation: 0.7%, consensus 0.5% (-1.2% prior).

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