Wednesday, April 25. 2007
Capital goods
While the headline again looked good, the series I track showed, at best, a hesitant hiccup of a bounce.
Orders for U.S. durable goods rose more than forecast in March, signaling business spending started to recover as the first quarter ended.
Orders for goods made to last several years increased 3.4 percent after a 2.4 percent gain in February that was larger than previously estimated, the Commerce Department said today in Washington. Orders excluding transportation equipment rose 1.5 percent after a 0.4 percent drop.
Joe Richter, Orders for Durable Goods in U.S. Increased 3.4% in March
Bloomberg News, 25. April 2007
All the curvefitting in the world doesn't tell you much about whether US businesses are investing with confidence. Despite another poor reading, for now I continue to think there is an ongoing, soft landing a-la the mid-'90s. However, I will want to see year-over-year capital goods orders start to march well above 0% some time soon.
This is a nominal series, so below-zero growth indicates not stagnation, but outright pullback.
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I, too, think the core capital goods orders series is a worry.
I am fascinated at this notion, though not exclusively yours, that it is possible to match up the coming state of the economy with some prior period, such as the mid-1990s slowdown. We humans have so far proven unable to refine our view of the economic future even to the point of getting "growth/no growth" right. How is it possible to narrow it down to "grow like in the mid-1990s"?
I am fascinated at this notion, though not exclusively yours, that it is possible to match up the coming state of the economy with some prior period, such as the mid-1990s slowdown. We humans have so far proven unable to refine our view of the economic future even to the point of getting "growth/no growth" right. How is it possible to narrow it down to "grow like in the mid-1990s"?
While I can't speak for others, it's my habit to use historical periods as shorthand. When I say, 'a-la the mid-'90s,' it saves exposition. Sure, things are always different. Drawing the parallel does not predict a similar growth path, but calls attention to the similarities. In this case, we saw a couple similar slumps in this series without a recession.
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Tracked: Apr 30, 16:44
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