Durable goods better than expected

Surprisingly, May durable goods were not only positive, but they matched April's increase. It appears that inventories of manufactured goods remain at low levels.

• Durable goods orders increased 1.8% in May from the prior month. We expected a decline of at least -0.7%.
• We note that shipments were down 2.1%; however, shipments of cores capital goods were up 0.3%. This was the first increase since Dec.

Again, we may have been too pessimistic about this economy. However, we remain cautious.