{"id":1822,"date":"2020-08-26T13:14:38","date_gmt":"2020-08-26T17:14:38","guid":{"rendered":"https:\/\/naroffeconomics.com\/?p=1822"},"modified":"2020-08-26T13:14:38","modified_gmt":"2020-08-26T17:14:38","slug":"july-durable-goods-orders","status":"publish","type":"post","link":"https:\/\/naroffeconomics.com\/?p=1822","title":{"rendered":"July Durable Goods Orders"},"content":{"rendered":"\n

KEY DATA:<\/u><\/strong> Durables: +11.2%; Ex-Transportation: +2.4%; Private (Core) Investment: +1.9% <\/p>\n\n\n\n

IN A NUTSHELL:<\/u><\/strong> \u201cThe economy is roaring back.\u201d<\/em><\/strong><\/p>\n\n\n\n

WHAT IT MEANS:<\/u><\/strong> The economy seems to be rebounding at a startlingly robust pace.<\/em><\/strong>  The recent economic data have come in above forecasts, especially when it comes to housing, and now we see that businesses are getting back into capital spending mode.  Durable orders soared in July, blasting through expectations.<\/em><\/strong>  In a rarity, there was not one major sector that posted a decline in demand.<\/em><\/strong>  This report was filled with crazy good numbers.  Orders for vehicles and parts soared to its highest level since this measure was introduced in February 1992.<\/em><\/strong>  The government is pitching in as defense capital goods demand jumped 30% and for the first seven months of this year is up over 12% over the same period in 2019. As for businesses, they are spending on capital goods again and the level is back to where it was in February.<\/em><\/strong> Interestingly, despite the surge in orders, backlogs are declining, which raises questions about future gains in manufacturing production and hiring.  <\/p>\n\n\n\n

IMPLICATIONS:<\/u><\/strong> Well, it looks like the National Bureau of Economic Research, the keeper of the business cycle, may have to start thinking about dating the end of the recession.  Yesterday, we got another sign that the housing market is booming when new home sales skyrocketed in July<\/em><\/strong>and that goes along with other housing data.  Today we saw that investment in big-ticket items is in the stratosphere.  And the stock markets keep hitting new record highs.  It is almost as if there was no pandemic and few firms or households were harmed greatly by the shutdowns and losses of income and demand.  <\/em><\/strong>Am I the only one that thinks something strange is going on here? We need to step back from the numbers a little.  Are the reports we are seeing sustainable?  Households don\u2019t seem to think so.  The Conference Board\u2019s August report on consumer confidence fell sharply and the University of Michigan\u2019s Sentiment Index remained at the lowest level in eight years. <\/em><\/strong>Optimism about the future is ebbing. Twenty eight million people are still receiving unemployment checks and their payments have been cut sharply. The special hazard pay put in place for critical workers is disappearing, further eroding spending power.  The world economy is weak, at best, and trade is minimal.  And the pandemic is surging along, largely unchecked and with schools and universities reopening, the number of new cases and deaths are likely to start rising again in the new few weeks.  Yet happy days are here again.  So, what is it that businesspeople know that households don\u2019t see?<\/em><\/strong>I just don\u2019t get it but as traders like to say, \u201cthe trend is your friend\u201d, so just go with it. <\/p>\n","protected":false},"excerpt":{"rendered":"

KEY DATA: Durables: +11.2%; Ex-Transportation: +2.4%; Private (Core) Investment: +1.9%  IN A NUTSHELL: \u201cThe economy is roaring back.\u201d WHAT IT MEANS: The economy seems to be rebounding at a startlingly robust pace.  The recent economic data have come in above forecasts, especially when it comes to housing, and now we see that businesses are getting back into capital spending mode.  Durable … Continue reading July Durable Goods Orders<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1822","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1822","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1822"}],"version-history":[{"count":1,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1822\/revisions"}],"predecessor-version":[{"id":1823,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1822\/revisions\/1823"}],"wp:attachment":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1822"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1822"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1822"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}