{"id":1979,"date":"2021-03-24T09:33:52","date_gmt":"2021-03-24T13:33:52","guid":{"rendered":"https:\/\/naroffeconomics.com\/?p=1979"},"modified":"2021-03-24T09:33:52","modified_gmt":"2021-03-24T13:33:52","slug":"february-durable-goods-orders","status":"publish","type":"post","link":"https:\/\/naroffeconomics.com\/?p=1979","title":{"rendered":"February Durable Goods Orders"},"content":{"rendered":"\n

KEY DATA:<\/u><\/strong>  Durable Orders: -1.1%; Civilian Aircraft: +103.3%; Ex-Aircraft: -3.1%; Motor Vehicles: -8.7%; Private Investment: -0.8%<\/p>\n\n\n\n

IN A NUTSHELL:<\/u><\/strong> \u201cAfter nine consecutive solid gains, we shouldn\u2019t be surprised to see a decline in orders for big-ticket items.\u201d<\/em><\/strong><\/p>\n\n\n\n

WHAT IT MEANS:<\/u><\/strong>\u00a0 A number of economic indicators bounce around, but demand for big-ticket goods tend to be extremely volatile.\u00a0 That is why little should be read into the drop in durable goods orders in February.<\/em><\/strong>\u00a0 Still, this was a very weak report as the only major category to show a significant sign of life was civilian aircraft.<\/em><\/strong>\u00a0 Boeing is recovering and when their orders rise, it usually means the economies in the U.S. and the world are moving forward.\u00a0 In this case, it has more to do with the 737 Max issue than fundamental economics.\u00a0 If you remove the aircraft numbers, including defense, then there was a massive decline in orders.\u00a0 Much of that came from the problems the vehicle sector is having with its supply chain \u2013 computer chips in particular. <\/em><\/strong>\u00a0This is slowing production.\u00a0 The only other sector to post a rise, though it was nominal, was electric equipment and appliances.\u00a0 Also, the proxy for private investment spending, nondefense, nonaircraft capital goods orders, also declined.<\/em><\/strong>\u00a0 But it too had been up for nine months, so there is really not much to be concerned about, at least at this point. <\/p>\n\n\n\n

IMPLICATIONS:Sometimes economic reports have to be simply looked at and put aside.\u00a0 While today\u2019s durable goods orders numbers were weak, one month does not make a trend.<\/em><\/strong>\u00a0 That is true given the weather situation, though it is not clear why that would have played a major role in the decline.\u00a0 The bad weather had a more direct impact on the housing sector and probably vehicle sales.\u00a0 The simple reality is that the economy is in good shape and almost everything is moving in the right direction: The stimulus is hitting consumer bank accounts, vaccinations are ramping up and at least until recently, virus cases and especially deaths were trending downward.<\/em><\/strong>\u00a0 Even with the beginnings of a resurgence in cases, governors seem committed to reopening regardless of the potential health consequences.\u00a0 Thus, we should start seeing even greater job gains in those sectors that have been restricted in their operations.<\/em><\/strong>\u00a0 And as the rate of vaccinations keeps accelerating, household, business and investor confidence should improve, possibly sharply.\u00a0 We are not out of this yet, but there is a growing perception that the end is in sight and that can only lead to strong growth in the quarters to come.\u00a0<\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

KEY DATA:  Durable Orders: -1.1%; Civilian Aircraft: +103.3%; Ex-Aircraft: -3.1%; Motor Vehicles: -8.7%; Private Investment: -0.8% IN A NUTSHELL: \u201cAfter nine consecutive solid gains, we shouldn\u2019t be surprised to see a decline in orders for big-ticket items.\u201d WHAT IT MEANS:\u00a0 A number of economic indicators bounce around, but demand for big-ticket goods tend to be … Continue reading February 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-1979","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1979","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=1979"}],"version-history":[{"count":1,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1979\/revisions"}],"predecessor-version":[{"id":1980,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1979\/revisions\/1980"}],"wp:attachment":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1979"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1979"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1979"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}