Slump in US durable orders points to investment weakness

US durable goods orders declined 1.4% m/m, core orders fell by 0.4% m/m, with machinery orders down by 1.8% m/m. Core orders have fallen in every month since last October. 

Equipment investment probably contracted in the first quarter, but the improving survey evidence points to a rebound in the second quarter.

Capital Economics notes....

• The consensus forecast that durable goods orders increased by 0.2% m/m in February always looked too optimistic, but the reported 1.4% m/m decline turned out to be even bigger than the 0.8% fall we were expecting. 
  
  
• The only good news is that the survey evidence on capex intentions has improved over the past few months, so we expect to see a rebound in equipment investment in the second quarter.