Expectations are that durable goods orders in April slipped 1.5% deepening the fall of 0.3% in March which is highly anticipated as the surge in energy prices especially gasoline are highly correlated to transportations and auto sales which are the volatile components in this category, so for that the justification is already anticipated.

Yet, for the orders excluding transportations the volatile component that we have just mentioned, sales are projected to have dropped 0.5% after the recorded unexpected rise of 1.5% in March. Now durables are a very indicative sign to the economic sentiment and performance and I am not indicating here their weight in the growth component.

The theory that correlates confidence and spending is the most applicable on durable goods sales, for they are the long lived assets and are usually pricy and it takes confidence from buyers to be able to commit to just products and feel comfortable that their FINANCES ALLOW IT!

Confidence as the Conference Board showed yesterday has slipped yet to a new 16 year low, energy prices remains highly elevated in April especially gasoline, and Americans struggled to keep up with their living standards as is so the fall in durable goods today will be a very important clue that still consumers are not lured into new shopping sprees and creates more doubt regarding the effects to be for the fiscal stimulus.

If consumption and spending remain low then the highest contributing factor to the GDP will remain subdued and for that the economic wheel will not turn as fast as the latter half of the year, and instead the contributing factor will be INVENTORIES for they will remain high and that is a negative impact for that means the production will remain sluggish until the stockpiles are emptied.

Keep your eyes on the dollar and do no misinterpret the figures for as we said the headings of the economy and the new production and spending patterns are what count not the figure itself