Economists are surprised by the latest report on strong durable goods orders, released this morning. “It’s a beginning. But, since it was just one month, since it was a rebound from a whopping decline, and because durable goods orders are volatile, the evidence remains unconvincing,” says BMO Nesbitt Burns chief economist Sherry Cooper

BMO Nesbitt Burns notes that the orders figures still show declining trends, “but there are some signs that the rate of drop in basic industry is moderating. It will take more months of orders gains to confirm that the factory sector has stabilised.”

Cooper had called for a 50 basis point cut from the U.S. Federal Reserve Board, tomorrow.

“We doubt these figures will be a swing factor at the FOMC meeting, since the policymakers will all agree that orders need to be viewed on a moving-average basis to avoid distorted readings due to monthly volatility. Our moving-average charts show some tantalizing hints of modest movement toward recovery in basic industries, but the tech sector is still heading down.”