June 23, 2006 – U.S. real non-defense capital good shipments excluding aircraft (an indicator of real business fixed investment in equipment & software, in the GDP accounts) edged down by 0.2% in May after a 0.6% April gain (Chart 1).
Despite the latest month’s slowing, the trend in these shipments stayed firm. Growth averaged a robust 0.8% per month (a 9.7% average annual rate) for the three months through May (Chart 2).
Real non-defense capital good shipments excluding aircraft rose by a sturdy 7% in May, compared to the same month last year (Chart 3).
Compared to their Q1 average, these shipments rose at a solid 5.8% annual rate for the first two months of Q2 (Chart 4).
Bottom line: Still on track for continuing good growth in real business equipment & software investment in Q2. However, the slowdown shaping up in the consumer sector will carry a much larger weight in Q2 real GDP growth.