Look behind last Friday's headline numbers for new orders of manufactured durables in February and the picture is not as encouraging, say economists at Merrill Lynch & Co., New York.
The combination of a 2.3% decrease in new orders for non-defense, non-aircraft capital goods and a 1.1% decline in shipments of non-defense suggests companies could be doing less-than-expected capital spending this quarter and next, advises Merrill. "With the Fed indicating they are data dependent in terms of any future [interest] rate moves, these numbers imply that capex will not be providing as much near-term support to growth should the consumer sector start to roll over more quickly than they anticipate."
Translation: slower-than-anticipated GDP growth.
