Some U.S. Data

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United States

Core durable goods orders in June fell .1% m/o/m instead of rising by .3% as expected BUT that was basically offset by a 5 tenths upward revision to May so we’ll call it a push. On a y/o/y basis, core orders are up by 4.5% but as seen in this chart of core cap ex in absolute dollars we remain well below not just the peak in 2014 but below pre recession levels.

CORE DURABLE GOODS ORDERS

 

Versus May, orders for autos, computers/electronics and electrical equipment all fell while machinery orders rose a touch (but still up 10% y/o/y) as did metals m/o/m and which were also up about 10% y/o/y. The journal of commerce index of industrial prices are also up about 10% y/o/y. Shipments of core orders rose by .2%, one tenth less than expected but May was revised up by 3 tenths. This figure gets included in GDP.

Bottom line, while unchanged in June, core capital spending (non defense capital goods ex aircraft) has improved this year but the chart puts the increase into perspective.

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Jobless claims rose by 10k w/o/w to 244k and that was 4k more than expected. The 4 week average though remained unchanged at 244k. Delayed by a week, continuing claims was down by 13k off the highest level since April. Bottom line is the same bottom line it’s been for a while with the modest pace of firings as employers know the difficulty in finding good, qualified labor.

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Wholesale inventories jumped by .6% m/o/m, double the estimate and retail inventories were up by the same rate. On the retail side, excessive auto inventories remain an issue as they were higher by 7.4% y/o/y. Bottom line, this higher than expected inventory jump could lead to a slight increase Q2 GDP estimates if followed by a similar rise in business inventories.

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The export of US goods rose to the best level since April 2015 and that led to a smaller than expected goods deficit in June. This may also lead to a slight improvement in Q2 GDP estimate. Exports are still though below the peak in this cycle seen back in August 2014 and Imports fell for a 2^nd month by .3%.