We have updated our privacy policy and terms & conditions. Find out more here.
0
 

Durable Goods Rebound In February

By  |  Market Overview  |  Mar 26, 2013 05:11PM GMT  |   Add a Comment
 
AA
+
-

New orders for durable goods increased 5.7% in February, the best month since last September, the Census Bureau reports. But the good news was marred by a 2.7% retreat in business investment (new orders for capital goods less defense and aircraft) last month. The mixed news extends to the year-over-year changes, with new orders overall rising 3.8% vs. year-earlier levels while business investment slumped 1.1% in February compared with a year ago. The update isn’t going to impress anyone, but the numbers du jour at least provide some support for thinking that the long-running deceleration in growth for new orders may have run its course.

Misleading Indicator
It’s worth mentioning that durable goods orders have been out of step with upbeat economic news from elsewhere in the economy in recent months. Indeed, most of the February data skews positive, as I noted last week. The weakness in durable goods orders shouldn't be ignored, but so far it's proven to be a misleading indicator of the broad economic trend.

One-Month Change
One-Month Change

Meantime, Tuesday's update suggests that the long-running slide in the growth rate for durable goods has bottomed out, as the next chart suggests. Yes, that's just speculation at this point. But if the rest of the economic reports continue to hold up in the March releases, it's reasonable to wonder if durable goods orders will mount a rebound in the months ahead.
12-Month Change
12-Month Change

Modest Growth Rolls On
A modest improvement in the numbers would be welcome, of course, and not all that surprising, either. With quite a lot of the rest of the economy continuing to post modest gains, durable goods orders have been out of step with the broad trend. For now, it's tempting to argue that the weak durable goods data that persisted in 2012 -- the descending one-year change comparisons in particular -- wasn't all that useful as a forward-looking indicator for the broad economy. Modest growth, with some fits and starts, has rolled on, despite the slowdown in new orders. If durable goods are headed for somewhat stronger comparisons in the spring, the outlook for the business cycle will have another friendly indicator in its corner.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data .

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Add a Comment

 

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Du
 
 
 
Are you sure you want to delete this chart?
 
 
 
Are you sure you want to delete this chart?
 
 
 

Successfully Reported

Thank you. This comment has been flagged for a moderator.
_touchLoadingMsg