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The good news in the report is that nondefense capital goods orders, excluding aircraft, gained 4.3 percent in April after declining 1 percent in March and 0.9 percent in February. Nondefense capital goods orders, excluding aircraft, is a leading indicator of business equipment spending in the GDP accounts.
"The report indicates that the real weakness in this recession is the consumer sector, not business investment. Business equipment investment was not overdone in the expansion and there are very few excesses to work off. Fortunately, the dollar is falling in value which increases the competitiveness of made products in international markets. The resulting strong export growth for
made capital goods is cushioning the manufacturing downturn."