Keeping an Eye on Durable Goods Orders

Today’s release of the data on durable goods orders for May showed a moderate drop of 1.6%, which is slightly surprising. Most economists had been expecting a solid increase, in keeping with the continued economic recovery.

Of course, the absolute level of durable goods orders is still quite high, and such series are notoriously volatile from month to month, so it’s never wise to make too much out of a one-month drop (or rise, for that matter). However, this is now the second month in a row of falling orders for durable goods. So it may be worth keeping your eye on this series – if there’s another one or two months of falling durable goods orders, this series might be telling us something unfortunate about the economy.