Monday, August 26, 2013

It's The Economy Stupid: Durable Goods Numbers Horrific

Economic Event

Period

Economic Survey

Actual Reported

Original Prior

Revised Prior

Durable Goods Orders

Jul

-4.0%

-7.3%

4.2%

3.9%

Durables Ex Transportation

Jul

0.5%

-0.6%

0.0%

0.1%

Cap Goods Orders Nondef Ex Air

Jul

0.5%

-3.3%

0.7%

1.3%

Cap Goods Ship Nondef Ex Air

Jul

0.3%

-1.5%

-0.9%

-0.8%

Dallas Fed Manf. Activity

Aug

4

--

4.4

--

 

Ugly!  Bad expectations for Durable Goods Orders were exceeded by even worse actual data.  Not much to look at favorably.

 

Orders for U.S. durable goods fell more than forecast in July after three months of increases, indicating manufacturing will be slow to strengthen.       Bookings for goods meant to last at least three years decreased 7.3 percent, the most since August 2012, after a 3.9 percent gain in June.  The median forecast of economists surveyed by Bloomberg called for a 4 percent drop. Orders waned for aircraft and capital goods such as computers and electrical equipment.

 

The report shows struggling overseas markets and the effects of federal government spending cuts are lingering and holding back manufacturing, which accounts for about 12 percent of the economy. Further improvement in the labor market and sustained demand for automobiles and housing would help spur production through the second half of the year.

 

Orders excluding transportation equipment, which is volatile month to month, declined 0.6 percent after a 0.1 percent gain in June that was previously estimated as a 0.1 percent decrease.   Forecasts for all durable goods orders in the Bloomberg survey of 77 economists ranged from a drop of 8.2 percent to a 3 percent advance.  Today’s figures showed bookings for commercial aircraft decreased 52.3 percent after climbing 33.8 percent in June. Chicago-based Boeing Co. said it received 90 aircraft orders in July, down from 287 the previous month.

 

John Broussard

Assistant State Treasurer

Chief Investment Officer

State of Louisiana

Department of the Treasury

225-342-0013

jbroussard@treasury.state.la.us

 

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