Will Durable Goods Orders MoM be between 2% and 4% in May?

“Core ex-transportation durable goods orders have been growing steadily at ~1.1% MoM in April and 0.9% in March, with year-over-year growth of 9.1% — the strongest pace in nearly four years per Gallagher. If transportation orders add a modest positive contribution in May (rather than reverting sharply), the headline total could land in the 2-4% range as the natural sum of core momentum plus a small transportation tailwind.. The macro backdrop strongly supports continued positive durable goods orders: ISM Manufacturing Index rose to 54.0% in May (fifth consecutive month above 50), S&P Manufacturing PMI confirmed at 55.3 (strongest in three years), 172,000 jobs added in May beating 85,000 consensus, and computers/electronic products orders rising in 11 of past 12 months. This environment makes a moderate positive headline reading more likely than a collapse..”

“This is a narrow bracket on a fat-tailed macro series. Headline durable goods orders are structurally dominated by transportation/aircraft volatility, so a specific 2% to 4% bin should have materially lower probability than 'all other outcomes combined.' The bull's own thesis admits the decisive driver is transportation noise, which is exactly why NO is stronger than YES.. April's official +7.9% print creates an unfavorable setup for a second consecutive moderate-positive landing in a narrow band. After a transportation-led spike, the next month is not 'naturally' 2% to 4%; the structurally higher-probability outcomes are either sub-2%/negative mean reversion if transportation normalizes, or another >4% upside tail if transportation remains hot. The bull is implicitly assuming a very specific partial-normalization path, which is only one slice of a much wider distribution..”