{"id":1863,"date":"2020-10-27T11:13:58","date_gmt":"2020-10-27T15:13:58","guid":{"rendered":"https:\/\/naroffeconomics.com\/?p=1863"},"modified":"2020-10-27T11:13:58","modified_gmt":"2020-10-27T15:13:58","slug":"september-durable-goods-orders-october-consumer-confidence-and-august-home-prices","status":"publish","type":"post","link":"https:\/\/naroffeconomics.com\/?p=1863","title":{"rendered":"September Durable Goods Orders, October Consumer Confidence and August Home Prices"},"content":{"rendered":"\n

KEY DATA:<\/u><\/strong>  Durables: +1.9%; Ex-Aircraft: +0.5%; Confidence: -0.4 point; Current Conditions: +5.7 points; Expectations: -4.5 points\/Home Prices: +1%; Over-Year: 5.7%<\/p>\n\n\n\n

IN A NUTSHELL:<\/u><\/strong>  \u201cThe manufacturing sector continues to hold its own.\u201d<\/em><\/strong><\/p>\n\n\n\n

WHAT IT MEANS:<\/u><\/strong>  The momentum from the reopening of the economy doesn\u2019t appear to be losing a lot of steam, despite a lack of stimulus.<\/em><\/strong>  Durable goods orders soared in September, but the headline number is a bit deceiving.<\/em><\/strong>  If you removed aircraft from the mix, since an order today usually doesn\u2019t lead to much change in production for a while, you get a much more moderate rise.  And if you just exclude civilian aircraft, orders would have been down.<\/em><\/strong>  And it was not as if Boeing\u2019s orders surged.  Instead, they went from cancellations to new orders and that added greatly to total orders.  The problem is that the details were quite mixed.  While demand for metals, motor vehicles and communication equipment rose, orders for computers, machinery and electrical equipment were off. <\/em><\/strong> There was one clearly positive number in the report:  The proxy for business capital spending, nondefense capital goods orders excluding aircraft, increased sharply once again.  Businesses are investing.<\/em><\/strong><\/p>\n\n\n\n

The Conference Board reported that consumer confidence was down modestly in October.<\/em><\/strong>  However, there was a major break between the current and future conditions segments.  Not surprisingly, the current state of economic activity was viewed as getting better.  But the hopes for a strong future economy faded.<\/em><\/strong>  Consumers are beginning to worry that growth could get worse in the next six months and that could affect their spending decisions.<\/p>\n\n\n\n

Another housing report, another blockbuster number.\u00a0 The Case Shiller national home price index rose sharply in August and the year-over-year gain keeps accelerating.<\/em><\/strong>\u00a0 Most of the twenty major metro areas posted gains.\u00a0 The only outlier was New York.\u00a0 The city\u2019s housing market is being battered by the trend toward suburban living.\u00a0 <\/p>\n\n\n\n

IMPLICATIONS:Thursday, the first estimate of third quarter GDP will be released and the data all point to a massive rise.<\/em><\/strong>\u00a0 The estimates range from about +25% to +35 and anything in that range will set a new record.\u00a0 But that is last quarter\u2019s news.\u00a0 Where do we go from here?<\/em><\/strong>\u00a0 That is less clear.\u00a0 Housing is holding up and with mortgage rates at historic lows this sector should remain strong. But given how far it has come, can it grow a lot more?\u00a0 That is doubtful<\/em><\/strong> without getting into a real bubble situation.\u00a0 Job gains remain strong, but so are layoffs.<\/em><\/strong>\u00a0 That points to slowing payroll increases.\u00a0 And the stimulus money is running out quickly<\/em><\/strong> and if we don\u2019t get something before the election, we may not get anything until next year.\u00a0 But that is speculation.\u00a0 The reality is that we haven\u2019t seen any major softening in the economy.\u00a0 Businesses are investing, consumers are buying, homebuyers are frantically looking for something to buy at any price and the government, well it’s the government <\/em><\/strong>so let\u2019s not say any more about that.\u00a0 Until the numbers actually start showing a slowdown, it has to be assumed that the fourth quarter will also be very good, but very good in traditional terms: Let\u2019s say over 4% growth.\u00a0 The wild cards remain the surging virus and the uncertainty about a vaccine.\u00a0 That makes economic forecasting not much more than throwing darts. <\/em><\/strong>\u00a0I\u2019ve decided to switch to my left hand, since my right has not done particularly well lately.\u00a0 \u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

KEY DATA:  Durables: +1.9%; Ex-Aircraft: +0.5%; Confidence: -0.4 point; Current Conditions: +5.7 points; Expectations: -4.5 points\/Home Prices: +1%; Over-Year: 5.7% IN A NUTSHELL:  \u201cThe manufacturing sector continues to hold its own.\u201d WHAT IT MEANS:  The momentum from the reopening of the economy doesn\u2019t appear to be losing a lot of steam, despite a lack of … Continue reading September Durable Goods Orders, October Consumer Confidence and August Home Prices<\/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":[3],"tags":[],"class_list":["post-1863","post","type-post","status-publish","format-standard","hentry","category-economic-indicators"],"_links":{"self":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1863","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=1863"}],"version-history":[{"count":1,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1863\/revisions"}],"predecessor-version":[{"id":1864,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1863\/revisions\/1864"}],"wp:attachment":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1863"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1863"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1863"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}