US Durable Goods Orders: Strong headline in December, 2018 may start slow - Wells Fargo

Durable goods orders were up 2.9% percent in December while November’s numbers were revised higher. According to analysts from Wells Fargo, aircraft pushed the headline up while core orders were weak. 

Key Quotes: 

“Aircraft orders were supportive of the headline in December, but there was also strength excluding transportation, where orders were up 0.6 percent in December and November’s decline was revised to a gain. Defense orders were up a strong 19.5 percent.”

“Core capital goods orders, which exclude aircraft and defense, were the weak spot today, as they fell 0.3 percent as consensus expected a gain. That contradicts recent soft data for new orders.”

“The takeaway from the durable goods report today is that while the headline was strong, it was driven by defense and aircraft. Orders that indicate future business investment were down.”