There was lots of good news in May’s durable goods orders release. Especially important is that orders for nondefense capital goods excluding civilian aircraft orders (which tend to be volatile) rose to a new cyclical high. So did shipments of this stuff. The former jumped 14.4%, and the latter rose 9.1% based on the three-month change in the three-month average at an annual rate.
These numbers suggest that capital spending could boost real GDP growth this year. That shouldn’t be a surprise given record corporate profits and cash flow, as well as record cash on corporate balance sheets, plus record low borrowing rates and the 100% depreciation allowance for 2011.