The data on US durable goods orders for May were mixed. Total orders fell 0.3 percent but excluding transportation, orders rose 0.7 percent while nondefense capital goods orders excluding aircraft rose 1.0 percent.
Some economists saw little in the data to deter the Federal Reserve from another rate hike this week, according to Reuters.
Economists said the headline number was disappointing, but would not deter the Federal Reserve from a 17th consecutive interest rate hike when its policy-setting Federal Open Market Committee meets next Wednesday and Thursday...
"I would look past the fact that orders declined and point to ex-transportation, which was up," said Ken Mayland, president of Clearview Economics LLC in Pepper Pike, Ohio. "Manufacturing continues to be in darn good shape. Business is good in manufacturing."
Others saw it a little differently.
"The headline number was a negative surprise, there's just no getting around that, and you had a downward revision the previous month," said Michael Woolfolk, currency strategist at the Bank of New York. "Leading indicators yesterday suggest a slowing of the economy over the next three to six months, and this report fits in line with that."
Meanwhile, in his mid-year forecast, John Mauldin also says he thinks that the US economy is headed for a slowdown.
Between the central banks of the world almost universally tightening, commercial banks poised to tighten and the US housing market looking like it is going to slow as interest rates rise, it is very likely the US economy is going to slow down in the last half of the year. The question is, "How much?"
I do not think we will be in an actual recession by the end of the year. But a recession is not out of the question for 2007. If the Fed does not have to go too far (and 5.5% may be too far given the other conditions in the world), then we could see a slowdown on the order of what we saw in the mid-90's. We will have to watch the yield curve and other indicators.
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