Strong demand for communications equipment, machinery and fabricated metal led an upbeat durable goods report for April. Overall orders jumped by 1.9%.
Most analysts were wrong and had expected only a rise of 0.4%.
The bounce in new orders was broad but was led by communication equipment which alone was up 6.9 percent. Significant new orders were also seen for fabricated metals, machinery, primary metals, and electrical equipment. The monthly upward momentum was the best since December 2007.
The report also comes at a time when the cost of shipping raw materials has now jumped almost vertically. The Baltic Dry Index is up 377% from its December low.
Additional good news on the employment front posted on Thursday. New claims for unemployment continue to fall as does the 4 week moving average. The new data further solidifies Bob Gordon’s assertion that the latest (and several weeks past) peak in claims will be the clear marker for this recession’s end.
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