The capital goods sector is showing life, helping to limit April’s aircraft-related decline in durable goods orders to a roughly as-expected 0.5 percent. Ex-transportation offers a core reading which is encouraging, up 0.5 percent following a 0.6 percent gain in the prior month.

Strength in nondefense capital goods excluding aircraft reflects strength in business investment which has been soft. New orders for this reading rose a strong 1.0 percent following an even stronger 1.5 percent gain in the prior month. Shipments, after rising 1.0 percent in March, rose another 0.8 percent in April which may give a bit of a boost to second-quarter GDP estimates.

Civilian aircraft have been, as they often do, distorting headlines for this report. Orders for civilian aircraft fell 3.6 percent in April, which of course pulled down today’s headline, after surging 54.9 percent which really inflated the headline from March, now at a revised plus 5.1 percent (initially plus 4.7 percent).

Orders for motor vehicles are showing strength, up 0.3 percent in the month following a very strong 4.2 percent rise in March. Transportation all together fell 2.5 percent following an outsized 15.2 percent gain in March.

Other sectors of note include a 3.1 percent order surge for machinery which is the center of the capital goods group. Orders for fabricated metals rose 1.9 percent with primary metals up 1.0 percent. Computers & electronic products showed weakness, down 3.6 percent.

There are soft spots but the underlying theme is one of improvement in what is the best news in a long time out of the troubled factory sector which is struggling with weak exports and contraction in energy equipment.