The Commerce Department’s reading on durable goods is one of the most volatile economic reports issued each month. Then there is the notion that weather in much of the Midwest and Northeast has kept people at home and out of stores. January’s reading came in at -1.0%, which is a bit better than expected on the headline data.

Bloomberg had the consensus reading at -1.6%, but its range was -4.8% to a gain of 2.0%. Dow Jones had the consensus reading at -2.0%.

Durable goods on an ex-transportation basis were up 1.1% in January, but the report was down by 1.8% on an ex-defense basis. The ex-transportation figure was the best reading in more than six months, as aircraft orders were weak.

December’s bad numbers were also made even worse in the revisions. The headline December report was revised down to -5.3% from an already ghastly -4.2%. December’s ex-Transportation report was also lowered to -1.9% from -1.6%.

One key component we watch is the overall business spending, measured by the non-defense capital goods ex-aircraft. This rose by 1.7% in January. To us, this signals that the business spending is holding up for capital goods and large ticket items.

Again, Thursday’s report is one of the most volatile readings each month. Still, things might not be as bad as they seem on the headline — barring that awful revision for December. As a reminder, the December reading will not have any impact on first quarter GDP in 2014.

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