Merrill: Durable Orders Suggest Lower Capex

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.

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