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Fast Money & Foreign Objects
May 27, 2014, 3:31 PM ET
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U.S. Navy
U.S. Navy placed a record order in April for killer subs.
U.S. nuclear subs surfaced in a big way in the April durable-goods report. A record Navy construction contract powered a 0.8% gain in durable-goods orders last month when Wall Street was actually expecting a 0.8% drop.
In April, the Navy inked a $17.6 billion contract for 10 nuclear-powered attack submarines. Contractors General Dynamics Electric Boat GD +0.01%and Huntington Ingalls Newport News Shipbuilding hii HII will handle construction. The deal could reach as high as $17.8 billion under certain conditions.
The huge contract led to a 39% increase in defense orders in April, using seasonally adjusted numbers. Orders for defense capital goods rose to $12.89 billion from $9.3 billion in March and $7.8 billion in February.
Of course, the subs won’t all be built right away, so the benefits to the economy will be spread out over the next five years.
The boom in demand for military equipment spruced up an otherwise drab durable-goods report. Booking for big-ticket U.S. goods actually fell in April if defense is excluded. Orders often fall in the first month of a new quarter.
Yet orders were revised sharply higher in March and the annualized pace of business investment over the past three months accelerated to the highest rate since last June, perhaps a sign that businesses might be ready to spend more after years of caution.
- Jeffry Bartash
Follow Jeffry on Twitter @jbartash
Follow Capitol Report on Twitter @capitolreport
This one order made durable-goods bookings grow in April - Capitol Report - MarketWatch
EmailPrint
U.S. Navy
U.S. Navy placed a record order in April for killer subs.
U.S. nuclear subs surfaced in a big way in the April durable-goods report. A record Navy construction contract powered a 0.8% gain in durable-goods orders last month when Wall Street was actually expecting a 0.8% drop.
In April, the Navy inked a $17.6 billion contract for 10 nuclear-powered attack submarines. Contractors General Dynamics Electric Boat GD +0.01%and Huntington Ingalls Newport News Shipbuilding hii HII will handle construction. The deal could reach as high as $17.8 billion under certain conditions.
The huge contract led to a 39% increase in defense orders in April, using seasonally adjusted numbers. Orders for defense capital goods rose to $12.89 billion from $9.3 billion in March and $7.8 billion in February.
Of course, the subs won’t all be built right away, so the benefits to the economy will be spread out over the next five years.
The boom in demand for military equipment spruced up an otherwise drab durable-goods report. Booking for big-ticket U.S. goods actually fell in April if defense is excluded. Orders often fall in the first month of a new quarter.
Yet orders were revised sharply higher in March and the annualized pace of business investment over the past three months accelerated to the highest rate since last June, perhaps a sign that businesses might be ready to spend more after years of caution.
- Jeffry Bartash
Follow Jeffry on Twitter @jbartash
Follow Capitol Report on Twitter @capitolreport
This one order made durable-goods bookings grow in April - Capitol Report - MarketWatch
