- After falling in March, durable goods orders increased 3.3% in April
- Weak growth in orders and high levels of inventories signal only modest employment growth
- S&P 500 Index still on course for our 2013 target of 1,720
April durable goods orders rose 3.3% from March. Excluding the volatile transportation component, orders rose 1.3%. Shipments of durable goods decreased 0.6% after increasing 3.3% in March. Inventories reached their highest level since the series began in 1992.
Defense aircraft and parts orders rose 53% for the month but are down 37.6%, reflecting the anticipated and actual effects of the sequester. The big drag from cuts to defense should be pretty well behind us. While defense might not add much to growth, it might not subtract much more.