The durable goods report for April is turning out to look incredibly durable at 3.3% for the month. Bloomberg had the consensus estimate of 1.1% and Dow Jones had the consensus at 1.3%. Even the reading that excludes transportation was up by 1.3%, versus a Bloomberg consensus of only 0.4%. This will put recession fears to bed, if the investment community is myopic. With this being the first month of the second quarter, it is fathomable that we could see some increased expectations for gross domestic product, just as we saw after the NABE data.

The Bloomberg economist range was very wide, from a negative report of -2.2% to a positive 4.2%. Before hanging too much weight on this economic report. remember that durable goods is one of the most volatile readings out there from month to month, regardless of the business cycle.

The preliminary March report was -5.8% and was revised to -5.9%. Keep in mind that this total durable goods report showed an adjusted $222.6 billion for April. While defense aircraft and parts were up more than 50% and while civilian aircraft orders were up 18%, this was still better than expected.

Durable goods is so volatile because it includes big-ticket items that last for many years. Literally one or two major delays or early decisions can influence this number. Bloomberg even notes on its charting, “Monthly fluctuations in durable goods orders are frequent and large and skew the underlying trend in the data. In fact, even the yearly change must be viewed carefully because of the volatility in this series.”

Goldman Sachs already has predicted (and likely bet on) higher long-term rates by the fall and by the end of this year.

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