NEW YORK (Reuters) - New orders for long-lasting U.S. manufactured goods rose more than expected in July on strong demand for aircraft and motor vehicles, government data showed on Wednesday, but a gauge of business spending fell.
SEBASTIEN GALY, SENIOR CURRENCY STRATEGIST, SOCIETE GENERALE, LONDON
“It is quite encouraging as it shows the weakness in the U.S. economy is not as severe as had been expected. That’s good for growth-sensitive currencies, particularly the Mexican peso and Canadian dollar, and should be good for equities.”
SCOTT BROWN, CHIEF ECONOMIST, RAYMOND JAMES, ST. PETERSBURG, FLORIDA
“The headline figure was a lot stronger, the ex-transportation number was better than expected. A lot of that was just the simple volatility that we see in the transportation sector. It tends to be pretty choppy. It’s nothing you’d want to hang your hat on.”
“It’s consistent with the idea of positive growth but not especially strong. The underlying trend is certainly good.”
GENNADIY GOLDBERG, FIXED INCOME ANALYST, 4CAST, INC., NEW YORK
“This is a strong report, but there seemed to be a lot of seasonal corrective factors as well. The more recent data’s been saying this is quite unlikely to be sustained.
“Focus is still on Friday and Bernanke. We’re not seeing any further easing coming from Friday. It seems that equities are getting a little ahead of themselves on that front. There really isn’t much the Fed is going to do on Friday and there’s a lot of room for disappointment.
“The more positive data is unlikely to be sustained. This is part of the reason there isn’t much of a reaction in Treasuries on durables. If we see this for a few months, then people will start rethinking their picture of things.”
“It was much better than expected across the board and with the upward revisions you can see upward revisions to Q2 GDP when that report comes out later on this week.
“When you look at the hard data that has been coming out the past couple of weeks it has been much better than the sentiment surveys that we have been seeing, so there has been a contrast in data between these manufacturing sentiment surveys and the consumer confidence and the hard data. The hard data seems to be holding up pretty well. Whether or not one catches up to the other in subsequent months has yet to be seen.”
VIMOMBI NSHOM, ECONOMIST, IFR ECONOMICS, A UNIT OF THOMSON REUTERS
“The 4% growth for durable goods orders in July more than made up for June’s decline of 1.3%, and was also ahead of market expectations predicting a rebound around 2% to recover June’s originally reported decline of 2.1%. July’s numbers give off the impression of a less struggling sector than some manufacturing surveys had implied for the month. Some of the kinds of businesses outside transportation are still soft (fluctuating up and down from month to month) like machinery and computers, so the report is not a complete contradiction. Excluding transportation, orders rose 0.7%, which is similar to June’s growth of 0.6%. Not so similar to June, transportation orders supported the headline in July up 14.6%, compared to June’s drop of 6.7%.”