First, the bad news:
Durable Orders Dip Unexpectedly in May Wed June 25, 2003 08:55 AM ET By Caren Bohan WASHINGTON (Reuters) - Orders for costly U.S.-made goods fell in May for the second month in a row, the government said on Wednesday in a report showing economic weakness as Federal Reserve officials meet to discuss interest rates.U.S. durable goods orders sank 0.3 percent last month -- in contrast to the expectations of private economists that they would rise 0.8 percent. The data from the Commerce Department showed April orders plunged 2.4 percent, revised down from an earlier reported 2.3 percent drop.
The report showed broad-based weakness in demand for big-ticket items, with categories such as cars, computers and machinery showing declines.
The good news is that both new and existing home sales increased in May, new homes by a record 12.5%. This is not surprising, as mortgage rates are at record lows, and the housing market has been remarkably resilient even during the height of the downturn.
The durable goods report, in my opinion, is somewhat more troubling, particularly in light of the continued weakness in the employment sector, industrial production and consumer confidence. I'm now curious as to whether it will have an impact on the Fed's rate decision this afternoon.
Posted by MB at June 25, 2003 10:29 AM | TrackBack