Sign already weak commodity-based sector becomes weaker.
Boeing, where are you? Boeing suffers from a sharp decline in orders, and this results in a sharp decline in orders for "civil aircraft" in the commodity data published this morning by the Ministry of Commerce. But it's not just Boeing. It is broader and deeper, and it led to forecasts of GDP growth in the second quarter to be slashed.
Orders for durable goods – such as cars and appliances and other items designed to last at least three years – fell 2.1% in April compared to March to $ 248.4 billion (seasonally adjusted), and were down on a smidgen from last April the first year decline since January 201
In the diagram above, the historical increase in orders in July 2014 was caused by Boeing when it reported a large order of 324 aircraft a month.  Order intake in April this year comes after February and March had been substantially flat last year. This makes three months in a row without growth compared to the same period last year. And the data for orders in March was still not affected by the Boeing failure that only started.
Shipments of durable goods – goods ordered in earlier periods and delivered in April – fell 1.6% in April from March to $ 253.3 billion. They have ticked down quite consistently from their peak in December. Thanks to strength last year, shipments continue in April by 3.2% compared to the previous year.
This chart shows the annual change in transfers from the previous year. Notice the period in 2015 and 2016 – the "transport recession" – because a decrease in shipments causes a decrease in the transport sector. At that time, for the year 2016, GDP grew by a slightly slow 1.6%:
Analyze the durable goods orders further:
- Excluding transport, so that Fiasco on Boeing, orders in April was flat compared to March, but remained up 1.4% the year before.
- Outside the defense, the order fell 2.5% on a monthly basis and fell almost 2% from April last year.
Forecasts for GDP growth are slashed.
After this data was released, forecasts for GDP growth in the second quarter were slashed, including here mentioned by Bloomberg:
- JPMorgan Chase to 1.0% (from 2.25%)
- Barclays Plc is the 2%
- Oxford economy to 1.3% (from 1.6%).
New York Fed's Nowcast reported every Friday was reduced to 38 basis points today, to 1.41% growth (from 1.79% on May 17), after having already been taken down 41 basis points a week ago (from 2.2% May 10). There is a 79 basis point cut in just two weeks:
Today's fall of the New York Fed's Nowcast contains data on durable goods, including the manufacturer's inventories, undelivered orders, shipments and new orders. The drop in shipments (other charts from the top) were responsible for 23 basis points of 38-point cuts today.
In addition, the decline in sales of new homes was 4 basis points.
The Atlanta Fed's GDPNow gives a different point of view. Today's release crossed up to 1.3% growth, from 1.2% growth on May 16.
This is still very early in the quarter. We now digest aprildata. May and June data require some patience. So this quarter can still turn around, just as the first quarter did after a very miserable series of early data points. The strong data appear better quickly, given the data so far. However, the crummy Purchasing Managers Indices (PMIs) for services and production in May that we delivered yesterday do not paint a promising picture.
These PMIs show the slowest growth in orders since October 2009. Read … Suddenly US Service Industry Growth Dives, Manufacturing Gets Even Weaker
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