Thread: Durable Goods Orders Rise; Today's GDP Report Expected to be Revised Upward

Note the 2nd to last paragraph - if that holds true, we should see a market response today / tomorrow. :^

Durable-goods orders rise a healthy 1.9%
Martin Crutsinger, Associated Press
May 26, 2005



WASHINGTON, D.C. -- Factory orders for big-ticket manufactured goods rose a solid 1.9 percent last month, the best showing since November. Sales of new homes hit an all-time high.

The reports provided further evidence that the economy has recovered from its March slowdown.

The Commerce Department said the increase for durable goods was propelled by strong demand for transportation equipment, especially airplanes, which helped push up the overall number by $3.71 billion to a seasonally adjusted $200.3 billion. Excluding transportation, orders would have edged down a slight 0.2 percent.

In a second report, the Commerce Department said sales of new homes, which were already at a record level in March, inched even higher in April, rising 0.2 percent to an annual rate of 1.316 million units. The median price of a new home jumped 6.1 percent to a new all-time high of $230,800.

Economists said the strength in both reports showed that worries of a serious slowdown from this year's oil shock were overblown.

"In March we had a combination of bad weather and bad seasonal adjustment problems which made that month look too weak," said David Wyss, chief economist at Standard & Poor's in New York.

He said the data so far indicate economic growth for the first three months of the year will probably be revised up in a government report today to around 3.5 percent, compared with the originally reported 3.1 percent growth. Wyss said the strength already seen in April compels him to increase his estimate for second quarter growth as well.

"It looks like we will get around 3.5 percent growth for the first half of this year, which is pretty darn good," he said.