US: Durable goods orders under pressure - Wells Fargo

US Durable goods orders rose during January. According to analysts at Wells Fargo, even with the modest rebound suggested by the underlying details, equipment spending growth still looks poised to slow in the first quarter. They see that today’s hard data provide some comfort after the recent volatile readings of the new orders component of the ISM manufacturing index.

Key Quotes: 

“Durable goods orders rose 0.4% in January. But, looking through the often volatile gain from transportation, orders were down 0.1%.”

“After slipping for four out of five months, core capital goods orders—a gauge of future business spending—rose 0.8%. The 3-month annualized rate of this measure, however, remains weak, suggesting a more modest contribution to spending in Q1.”

“Core capital goods shipments, which feed into GDP, were also up 0.8%. This gain suggests that while we expect a slower pace of spending in the first quarter, growth should remain stable.”