The headline looks mixed -- the question is, what's inside?

New orders for manufactured durable goods in January decreased $11.8 billion or 5.2 percent to $217.0 billion, the U.S. Census Bureau announced today. This decrease, down following four consecutive monthly increases, followed a 3.7 percent December increase. Excluding transportation, new orders increased 1.9 percent. Excluding defense, new orders decreased 0.4 percent.

Transportation equipment, down three of the last four months, drove the decrease, $14.7 billion or 19.8 percent to $59.7 billion. This was led by defense aircraft and parts, which decreased $5.1 billion.

Led by, when that's 10% of the sector?  Someone needs to have a bit of a clue-by-four upside the head before they put ink to paper.

We have a little problem in the internals though; as you know I follow communications and computer equipment as a solid leading indicator of the economic picture.  And while there has been a two-month trend that was moderately positive, and appeared to be a potential corner last month, that has now disappeared and reversed -- violently.

There's nothing good there at all, and this terminates the premise that a potential recovery is afoot in the all-important communications and computing area -- which is a solid leading indicator for employment.

Non-defense capital goods were down 1.7% on shipments and 0.1% on new orders -- but excluding aircraft, new orders were up quite-materially.  The big slash-n-burn was in defense where new orders collapsed, down almost 70%.

The report isn't terrible, but it's also not good.  This series is notable volatile even in good times, but we're not looking at a strong report here.  While the defense figures are undoubtedly being influenced by the sequester, on-balance the report is at best a mixed bag with a tinge of bearishness for the broad economy.